An anchor tenant is an important tenant in a commercial building such as a mall, or a commercial set up of multiple offices that attracts other tenants into the property.
I will give you an example that will help you to understand the concept of an anchor tenant.
If you are a builder/developer of a shopping mall, you would want more shops and tenants on board to make the project a huge success. To achieve that, you would approach well known businesses or retail chain stores to rent an office in your complex, thus a big name gets associated with your project. This tenant will be known as anchor tenant/ prime tenant/ draw tenant/ key tenant.
Why is an anchor tenant important in commercial real estate?An anchor tenant as explained earlier, plays a key role in attracting more tenants within the vicinity of a project for a builder, which in return brings more customer base and income.
This tenant usually pays 5% to 10% lower rent since it has a ripple effect and brings more business for the developer of the commercial property. At times, they demand specific kinds of space and construction. Landlords usually sign the lease before the construction begins to incorporate their demands, if not, they have to make adjustments and alterations to suit their demands.
How to find an anchor tenant?In order to secure an anchor tenant make sure to do your market research before reaching out to the prospects. Such tenants rely on quality so make sure to bring that to the table. Make a proposal that comprises your past records, success rates, potential of the establishment as per the estimated customer turnout, etc.
Bonus tip:While evaluating your chances with the anchor tenants, evaluate all your options in case they decide to vacate. Think about how you will be dividing the space for multiple tenants, or will you redevelop completely or reposition the space to a new, value-enhancing use.
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What is anchor tenant?
Gagandeep Singh
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4 Year
2021-03-04T12:19:42+00:00 2021-03-04T17:16:42+00:00Comment
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