Vision Magazine - October/November 2023

Investors Love Supermarket-Anchored Real Estate Ron Dickerman, president and founder of Madison International Realty, calls investing in grocery-anchored retail the “most popular place” to invest in retail. A Forbes article titled “Why Grocery-Anchored Real Estate Has Become So Attractive To Investors” adds further sub- stance to his claims, identifying three key attractions of this retail real estate sub-sector. First, grocery stores offer life’s essentials, from food to household items. This fact positions them as resilient anchors in the ever-changing retail landscape, shielding them from many disruptions. Second, the grocery experience is deeply human-centered, whether due to individual tastes, the perishability of items or the regularity of weekly shopping trips. Lastly, their noteworthy performance during challeng- ing times stands out. For instance, in the pandemic’s early days, many stores saw a surge of in-person visits from panic buying, underscoring their role as vital communi- ty anchors. Reports from JLL Income Property Trust, an investment company, and ACROSS Magazine further un- derscore the enduring resilience of grocery-anchored real estate, emphasizing its stability in rents and occupancy, even during market upheavals. Since the onset of the pandemic, grocery-anchored retail has magnetized investors. The main driver? Its ability to attract foot traffic consistently day after day. As a testament to this trend, Westwood Financial boasts over

124 such developments nationally. Mark Bratt, Westwood’s chief executive, called it “a clear winner coming out of the pandemic, from the retail perspective.” The grocery sector thrives with an influx of new customers, heightened monthly expenditures, rising prices and the expansion of online delivery. Consequently, in the real estate domain, leading tenants prioritize multi-channel distribution, ad- ept management and prime locations in thriving markets. In 2021, a staggering 735 transactions underscored the significance of grocery-anchored retail properties. Moreover, the acquisition volume exceeding $13.3 billion led all retail property investments for the third consec- utive year, according to a report by Jones Lang LaSalle, a global real estate services company. By 2022, despite a slight decrease in transactions, investments soared to another new record of $14.7 billion. Contrary to early pandemic predictions that antici- pated a decline in these retail centers due to e-commerce growth, persistent consumer habits highlight the impor- tance of weekly supermarket visits. Moreover, with urban retail facing uncertainties, suburban grocery-anchored sites, particularly in the burgeoning Sun Belt regions, are set for remarkable growth. The future of commercial and retail real estate resem- bles a puzzle, where each piece uncovers either a new chal- lenge or a unique opportunity. As businesses grapple with debt concerns and the surge of online shopping, there’s a simultaneous wave of innovation reshaping our cities and

66 Vision Magazine

October/November 2023

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