Types of tenants
As a strategy, most retail malls have two types of tenants—anchor tenants and inline tenants. Anchor tenants are the key tenants with large stores and big names in the business. They attract other smaller tenants and customers to the mall. Inline tenants are small tenants. They benefit from the footfall that anchor tenants draw to the mall. Anchor tenants enter longer-term leases and pay lower rent than inline tenants.
The chart above shows the top ten largest rent payers in centers based upon total rent paid in 2014. CBL & Associates Properties’ (CBL) top tenants include big brands such as L Brands (LB), Signet Jewellers, Foot Locker (FL), Ascena Retail Group, American Eagle Outfitters (AEO), Forever 21, The Gap (GPS), Genesco, Dick’s Sporting Goods (DKS), J. C. Penney (JCP), and Aéropostale (ARO). In 2014, these brands contributed around 20% of total revenue, compared with 19.7% in 2013. L Brands contributed 3.2% of total revenue in 2014, followed by Signet Jewellers at 2.8%, Foot Locker and Ascena Retail at 2.2% each, and American Eagle at 2%.
As of fiscal 2014, the company’s malls had a total of 312 anchors, including seven vacant anchor locations and excluding anchors at its non-core and lender malls and freestanding stores. In 2014, CBL added new anchors such as Belk Home Store, Burlington, H&M Hennes & Mauritz, Michaels Stores, Ross Stores, and T.J.Maxx for its various properties. Anchors accounted for approximately 12.9% of total revenues from the malls in 2014. The SPDR Dow Jones Global Real Estate ETF (RWO) invests 0.2% of its portfolio in CBL.
In the next article, we’ll discuss CBL’s development and redevelopment projects.