Downsizing: The Proliferation Of Smaller Tenants For Landlords

Downsizing: The Proliferation Of Smaller Tenants For Landlords

May 01, 2017


Co-Author, Western Real Estate Business, May 2017

Retail landlords consistently face new challenges to their rent streams and delivery of promised investor returns. Although tenant trends are frequently short in duration and differ from submarket to submarket, retail leases should ensure landlords maintain the flexibility to adapt to changing market dynamics. The proliferation of smaller operators is a prime example of a retail leasing trend that is challenging landlords to think differently about the makeup of a shopping center. Another trend to consider is the shift away from traditional retailers from the perspective of lease drafting, specifically in the context of prohibited uses. With these key issues in mind, a landlord must ultimately have an eye toward the future to maintain the flexibility necessary to respond to emerging trends and ensure an attractive tenant mix at its shopping center.

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