Commercial Real Estate Dictionary

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Anchor Tenant

Definitions of Anchor Tenant
  • An anchor tenant is an occupant in a retail center that draws traffic which drives business for other tenants in that retail center.
    The grocery store is the anchor tenant of our local neighborhood shopping center which is right next to our dry cleaner.


What Is An Anchor Tenant?

An anchor tenant is an occupant of a retail shopping center that brings in a significant enough volume of customers to drive business for other tenants in that retail center.

Common examples of anchor tenants are large supermarkets or retail chain stores that attract large amounts of traffic. Because they bring in a large number of customers, they help adjacent businesses attract customers and achieve profitable sales volumes. An example of a tenant attracted by an anchor tenant such as a grocery store would be a dry cleaner.

Since anchor tenants drive sales for neighboring businesses, anchor tenants drive demand for space adjacent to them. As a result, the success or failure of a retail property can depend on the property investor's ability to attract an anchor tenant.

Aware of the power of the traffic they draw and ability to drive sales for other tenants in a retail center, anchor tenants have traditionally used this leverage to negotiate rents that are not profitable for the property owner alone. Retail property owners have traditionally depended on profits from their other tenants to earn a return.


        

Real Estate Terms

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2. Who can you go to to finance your construction or development project? Construction Lender >>


3. What professional can assist you in maximizing the value of your investment property? Asset Manager >>


4. How can we assess future commitment to infrastructure to support our communities and future development? Capital Improvements Projects >>


5. What measurement indicates if a property's financial performance can cover its debt? DSCR >>


6. What part of a city is the center of urban economic development? CBD >>


7. What allows property owners and professionals to estimate the market value of a commercial property? Comparable Property >>


8. What can landords do to entice prospective tenants? Concession >>


9. What critical factor do stores depend on to drive traffic? Anchor Tenant >>


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