When the Retail Anchor Becomes the Risk… or Opportunity?

Big box stores have recently been large contributors to the “retail apocalypse” facing owners of shopping centers with broad swaths of empty space. Some landlords are discovering that they need to take a more active role at the helm of their centers and find new ways to attract customers. The recent (and potential looming) bankruptcies of certain legacy anchor retailers suggest that the days of smooth sailing after building a center around a Sears are gone and that the success of retail developments will ebb and flow with the fortunes of a new school of tenants. Landlords are looking to deliver new, creative approaches for the re-use of big-box space (as we’ve discussed), and on a parallel course, some are redefining what constitutes an “anchor” and repositioning their centers around such stores and uses.

Traditionally anchors were easy to identify: big, bulky, one-stop shop department stores providing a steady flow of customers to ancillary and niche tenants. In today’s world anchors are becoming smaller and less obvious. Depending on the atmosphere a center is trying to create, some new users may even be those tenants who previously relied on big boxes for foot traffic.

So who are these retailers that landlords are relying on to keep customers coming to their properties? In classic enclosed malls, it may be an Apple store. In centers built around athletic apparel stores and healthy fast-casual concepts, it may be Equinox. Other centers may be anchored by WeWorks with the expectation that the work/play culture typical of small startups will bring in a large customer base looking to run errands, dine and be entertained in one setting. Of course, anchors need to remodel and repurpose by adding  attractions such as natural features, art installations and other experiential draws (see  Wynwood Walls in Miami) Landlords also need to be open to temporary deals and more flexible rental arrangements, as pop-ups continue to make headway as legitimate tenants who can refresh and enliven a retail center.

As these changes ripple through the retail environment, the outward appearance of centers and the negotiations that help create them will change, and what constitutes an anchor could continue to become more ambiguous. Tenants will likely try to capitalize on such ambiguity and claim they are the “anchor”; landlords should not be surprised if smaller stores that bring in outsized foot traffic try to throw their newfound weight around in lease negotiations to obtain the benefits (such as reduced CAM or tax charges, additional free rent, or increased tenant improvement allowances) that traditionally accrued  to the department stores.

Moving forward, a nimble and open-mind will help landlords adapt. This may require experimenting with new customer experience offerings, reevaluating negotiating strategies, or reallocating resources to attract key tenants. As is often the case when an industry is facing disruption, there is potential for great risk but the possibility of reward.

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Matthew E. Epstein's picture

American and international retailers turn to Matt Epstein for business and real estate law advice. Matt has coordinated the national roll-outs of stores for numerous retailers including J.Jill, J. Crew, kate spade, Tory Burch, Betsey Johnson and Swarovski Crystal, including the negotiation of leases at regional malls and urban locations. Matt has over 25 years of experience in a wide range of real estate matters.

Prior to joining the firm, Matt clerked for the Honorable Morey L. Sean, Federal District Court, Eastern District of Louisiana. He is a Director and a Co-Chair of the firm's Retail, Restaurant & Consumer group. 


Joe Sheridan is a real estate attorney who handles commercial real estate matters, including acquisitions, sales, leasing and financing.

His clients own and develop office and multifamily properties. Joe’s experience includes master plan developments in both urban and suburban areas, including working with development and homeowner associations. Joe handles the research, due diligence work, and preparation and negotiation of documents, including leases, purchase and sale agreements and closing documentation.