I think the answer to this depends on the market you are in. I would expect that Wal-Mart would increase retail traffic coming to the area, which could be of benefit to the tenants in the strip center. On the negative side, if any of the strip center tenants have to try and compete with Wal-Mart for their sales, this could be tough to do as many businesses have seen. I would think the impact on sales volumes could be a positive for certain types of businesses. The impact on rents could be the opposite, since in most cases increased traffic and sales volumes usually lead to higher rents when the opportunity arises. In my market, most centers in the immediate vicinity of large retailers usually increase their rents - sometimes by as much as 30-35%. Again, this depends on the market and the trade area that Wal-Mart will be serving.
Feb 6, 2009