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CASE STUDY

Strategic Property Positioning for
Grocery Retailers

Optimizing Development and Leasing Opportunities Through Data-Driven Market Analysis

Introduction

When a developer sought to relocate a Kroger store to a larger site, they faced a critical challenge: ensuring that the move would be financially viable and beneficial without negatively impacting existing locations. CRE 360’s research team stepped in to assess the market feasibility, identifying potential risks and opportunities. Through rigorous data analysis, the study not only prevented a misstep but also helped unlock new tenant possibilities, strengthening the developer’s—and potentially a landlord’s—negotiating position.

The CRE 360 Approach

01

Comprehensive Market Analysis

  • Conducted extensive fieldwork to evaluate existing store performance, competitive presence, and local market conditions.
  • Analyzed traffic patterns, customer demographics, and the competitive landscape to determine the potential success of a new grocery tenant.

02

Gravity Model Forecasting

  • Developed a gravity model to assess the impact of attracting different grocery tenants, considering factors like consumer behavior, trade areas, and competitive presence.
  • Forecasted potential sales performance and identified risks associated with various tenant scenarios.
  • Integrated future population growth and retail developments into the analysis to provide a long-term view.

03

Strategic Multi-Tenant Approach

  • When the study revealed that Kroger’s relocation wasn’t viable, alternative grocery retailers were identified.
  • Positioned the site as an opportunity for multiple grocers, ensuring competitive negotiations.
  • Identified Sprouts and Grocery Outlet as strong candidates based on local demand and competitive positioning.
  • Provided a study tailored to grocery tenants’ decision-making criteria, enhancing engagement with potential anchor tenants.

The Challange

Aggressive Expansion Timeline

The developer aimed to attract a high-value grocery tenant to a key location.

Quality at Scale

The site was surrounded by existing Kroger stores, raising concerns about sales cannibalization and overall feasibility.

Quality at Scale

Without strong data, developers and landlords often struggle to engage major retailers effectively, leading to delays or outright rejections.

Quality at Scale

The property owner needed a compelling case backed by solid revenue projections to attract potential tenants and secure favorable lease terms.

The Results

Data-Driven Decision Making

The study prevented the property owner from pursuing an unviable deal with Kroger and redirected efforts toward more feasible grocery tenants.

Competitive Positioning

The presence of a professional revenue forecast moved the developer’s or landlord’s proposal to the top of retailers’ priority lists.

Negotiation Leverage

By understanding expected tenant performance, the property owner gained insight into what prospective tenants could afford to pay in rent, aiding in lease negotiations.

Key Takeaways

Without a robust feasibility study, developers and landlords risk wasted time and resources on unviable deals.

A well-researched property positioning study enhances credibility with retailers and accelerates deal-making.

Data-backed negotiations help landlords and developers secure favorable lease terms by understanding what a retailer can afford to pay.

CRE 360’s white-glove approach ensures that clients receive expert guidance from initial property positioning through tenant engagement, maximizing the chances of a successful transaction.

By leveraging CRE 360’s expertise, the property owner was able to shift their focus from a single, impractical tenant to a range of viable alternatives, ultimately increasing their chances of securing a profitable deal.

Ready to accelerate your expansion strategy?

CRE360 Partners

Commercial Real Estate intelligence that combines rigorous data research with national transaction expertise.

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info@cre-360.com

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