Anchor Tenant

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Anchor Tenant

Tenants that are considered “credit worthy” and generate traffic for a retail facility (e.g. a supermarket in a neighborhood shopping center or a department store in a regional mall) are considered anchor tenants.

In other words it’s a major tenant in a shopping center that attracts majority of customers. The nature of an anchor tenant depends on the nature of the commercial activity. An anchor tenant pays a lower rent than that is paid by ancillary tenants. It is often necessary to have a lease commitment from an anchor tenant before a shopping center can be financed. Hence, agreements with anchor tenants must be made before most banks finances the construction of a mall or shopping center.

An anchor tenant is often referred to as a magnet store, anchor store, draw tenant, key tenant, prime tenant, or a traffic generator.

Because of the value that an anchor tenant can provide the landlord as far as appeal to other smaller tenants and heavy traffic draw, discounted rental rates can often be given to these large users. It’s not uncommon for an anchor tenant to reserve the right to approve the selection of a center’s other tenants in order to prevent competing (and much smaller) tenants from taking away customers.

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