Grocery-Anchored Real Estate Has a Big Quarter #GroceryAnchored #Real #Estate #Big #Quarter Welcome to Lopoid
Grocery-anchored real estate is typically a very safe bet for investors. But some firms that specialize in the segment said this week in reporting quarterly earnings that profits are even higher than they typically are.
New York-based Urban Edge Properties, which acquired a grocery-anchored shopping center in June in the greater Boston area, reported record levels of leasing activity in the quarter and the company’s highest volume in more than six years.
Indianapolis-based Kite Realty Group Trust, which focuses on grocery-anchored real estate, raised its 2022 guidance based on its strong 2022 earnings.
And so did Bloomfield Hills, Michigan-based Agree Realty Corporation, which also has a large number of grocery tenants.
Last month, a Mariano’s Fresh Market property in Chicago’s South Loop sold for more than $52 million.
“Grocery-anchored is always going to be the gold standard of multi-tenant retail,” said Barry Wolfe, a senior managing director with Marcus & Millichap, with a focus on retail properties. “But grocery stores are doing really well right now.”
It appears that the pandemic only served to strengthen the place of grocery-anchored real estate, as consumers depended on food at home as restaurants shuttered. Even with inflation, grocery sales have remained strong.
“They tend to be the most stable of all retail,” Wolfe said. “People go to the grocery store once a week, twice a week. They have to go, even with delivery and picking up.”
Kite Realty Group during the second quarter acquired grocery-anchored Palms Plaza in Boca Raton, Florida for $35.8 million, as well a building anchored by a Sprouts Farmers Market-anchored development in Dallas-Fort Worth for $21.9 million.
The undisclosed specialty grocer in the Boca Raton property generates about $1,300 per square foot in sales and is “located in the desirable, affluent Boca Raton community, and will be complementary to the company’s significant Florida portfolio,” Kite said in a statement.
While restaurants, particularly limited-service ones, have scaled back their footprints to eliminate dining rooms, there’s no clear evidence that grocery stores are similarly shrinking their square footage, he said. Some, however, are looking for parcels that have added room for curbside and even drive-thru grocery pickup, he said.
“Drive-thru is becoming more of a component,” Wolfe said.
Want breaking news at your fingertips?
Get today’s need-to-know grocery industry intelligence. Sign up to receive texts from Winsight Grocery Business.
The latest from Winsight Grocery Business, sent straight to your inbox.