Anchor Parcel

What is an Anchor Parcel?

An anchor parcel is a substantial section of land within a retail shopping center that is occupied or utilized by an anchor tenant. The parcel typically includes the anchor tenant’s commercial building, adjacent parking facilities, and surrounding landscaping. The control of an anchor parcel can vary—it may be directly owned by the anchor tenant or managed through a ground lease agreement.

Detailed Explanation

The anchor tenant often attracts additional traffic to the shopping center, benefiting smaller retailers. In terms of land use and management, the anchor parcel is crucial for supporting the activities and operational needs of the anchor tenant, including customer parking and logistical necessities.

Examples

Big Box Retailer: A large electronics store situated on an 8-acre anchor parcel within a major shopping complex, inclusive of a 200,000-square-foot building, extensive parking, and landscaped areas.
Supermarket Chain: A 10-acre anchor parcel dedicated to a supermarket, encompassing a substantial retail space, surrounding parking lots, and maintained landscaping features.
Department Store: A popular department store occupying a 12-acre anchor parcel at a regional shopping mall, with facilities including the main building, parking space, and ornamental greens.

Frequently Asked Questions (FAQs)

Q1: What is the primary benefit of an anchor parcel for smaller retail tenants?

A1: The primary benefit is increased foot traffic. Shoppers who come to the center for the anchor tenant’s products or services are likely to visit smaller retail stores, thus increasing overall business for these tenants.

Q2: What is a ground lease in the context of an anchor parcel?

A2: A ground lease allows the anchor tenant to lease the land from the property owner for an extended period, typically several decades. The tenant has significant control over the land usage and can construct buildings or other improvements.

Q3: Can an anchor tenant sublease parts of the anchor parcel?

A3: Yes, the terms of the underlying lease or ownership agreement can enable the anchor tenant to sublease portions of the parcel, such as parking or unused building spaces, to other businesses or entities.

Anchor Tenant: Major stores or chains that draw large crowds to a shopping center (e.g., big box retailers, supermarkets).
Ground Lease: A lease agreement that permits a tenant to use a piece of land (typically long-term) while the landowner retains ownership.
Common Area Maintenance (CAM): Costs associated with the upkeep of common areas within a property, which may be shared among tenants including anchor tenants.
Shopping Center: A group of retail stores and service businesses located in one complex, commonly anchored by one or more major retailers.

Online Resources

References

Retail Property Insights by John C. Struble, Journal of Real Estate Research
The Economics of Retail Market Areas by Roger Sinclair and Hazel Johnson

Suggested Books for Further Studies

Retail Development by Bob Glist, ISBN: 978-0470#####
Real Estate Finance and Investments by William B. Brueggeman and Jeffrey D. Fisher, ISBN: 978-0073377353

Real Estate Basics: Anchor Parcel Fundamentals Quiz

### What is an anchor parcel? - [ ] A parcel of land for residential use - [ ] A small retail shop within a mall - [x] Land under and around an anchor tenant in a shopping center - [ ] A parcel of land for agricultural use > **Explanation:** An anchor parcel pertains specifically to land under and around an anchor tenant within a shopping center, including buildings, parking, and landscaping. ### What does an anchor parcel typically include? - [ ] Only the anchoring building - [ ] Just the parking lot - [x] Tenant’s building, parking, and landscaping - [ ] Common areas of a residential area > **Explanation:** An anchor parcel generally includes the anchor tenant’s building, adjacent parking facilities, and landscaping. ### How can ownership of an anchor parcel be organized? - [ ] Through mandatory purchase - [x] Direct ownership or a ground lease - [ ] Joint engagement by tenants and landlords - [ ] Public-private partnership > **Explanation:** An anchor tenant can control an anchor parcel either through ownership or via a ground lease agreement. ### Why are anchor tenants crucial to shopping centers? - [ ] They maintain the upkeep of retail units - [ ] They provide security to the entire shopping center - [x] They attract significant foot traffic - [ ] They lease out small retail spaces to new tenants > **Explanation:** Anchor tenants help attract significant foot traffic, benefiting all tenants within the shopping center by increasing potential customer visits. ### What is the general term for costs associated with shared areas in a shopping center? - [x] Common Area Maintenance (CAM) - [ ] Ground Lease Costs - [ ] Public Utility Fees - [ ] Property Tax Allocation > **Explanation:** Common Area Maintenance (CAM) refers to costs linked with the maintenance of shared areas within the center, which might include shared with anchor tenants. ### What might an anchor tenant do if they have excess space within their anchor parcel? - [ ] Abandon it - [x] Sublease to other businesses - [ ] Offer it to the public for free - [ ] Demolish it > **Explanation:** Depending on the tenure agreement, an anchor tenant can sublease surplus space within their anchor parcel to other businesses. ### What is a common size for an anchor parcel? - [ ] Less than one acre - [ ] 1-2.5 acres - [x] Multiple acres, commonly greater than 5 - [ ] A few meters > **Explanation:** Anchor parcels are generally quite large, typically spanning multiple acres. ### Can an anchor parcel include non-retail establishments? - [ ] No, it’s strictly retail - [x] Yes, as long as it enhances the shopping experience - [ ] It depends on municipal regulations - [ ] Only if permitted by the state > **Explanation:** The anchor parcel may dynamically include non-retail establishments provided they add value and attract more visitors to the shopping center. ### Who benefits directly from the proximity to an anchor tenant? - [ ] Residential homeowners - [ ] Public commuters - [x] Other smaller retail tenants - [ ] Online retailers > **Explanation:** Smaller retail tenants benefit directly from the foot traffic en-mass resulting from the proximity to an anchor tenant. ### What do anchor tenants frequently seek in an anchor parcel? - [ ] Minimal parking space - [x] Sufficient infrastructure support like parking and strategic location - [ ] Residential amenities nearby - [ ] Elementary schools within delivery distance > **Explanation:** Anchor tenants often seek ample supporting infrastructure like extensive parking spaces and strategic placement within the shopping center for optimum accessibility.