What is the impact of a Wal-Mart store on rents or sales volume at an adjacent strip shopping center?

In Market Conditions - Asked by Jerry M. - Feb 3, 2009
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Chris G.
Lynchburg, VA

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
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Juan G.
Ontario, CA

Depends on who the tenants are next door. Wal-Mart will clear the waters on many tenants and therefore decrease the amount you can get on rent, as few will be able to beat Wal-mart on pricing. If the shopping center next door is higher end, then Wal-Mart may lower the desirability of the center.
On the other hand if the adjacent center has specialty shops, then it may increase desirability as more traffic will be attracted into the area. But in this market if you think you will be beneifited, the rents of that adjacent center will not necessarily be positively affected, but at least you may be able to retain the existing tenants and maintain the existing rental rates.

Mar 9, 2009
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