Picture your local grocery store. Is it near any other retailers? Maybe your preferred pharmacy is connected to it, your favorite fast food chain is in the same parking lot or your go-to clothing store is right next door. What we’re describing is called a “power center,” one type of retail property that RockStep Capital invests in. We’ll go more in-depth on power centers shortly…
But First, Retail
The commercial property industry is broad. From hotels to multifamily homes to offices and more, investment options abound. Why does RockStep focus on retail?
Even within the retail industry itself, there are a number of different property types, meaning capital investors still have choices to make. While our portfolio covers a few different types, in this piece, we’re diving deep into one of them: power centers.
Why Invest in Power Centers?
A power center is defined as an outdoor shopping mall featuring at least three big box anchor tenants, surrounded by a range of smaller tenants. Power centers can range anywhere from 200,000-600,000 square feet of leasable space, and anchor tenants typically lease a majority of that space. Currently, there are about 2,200 power centers across the United States.
RockStep Capital has a 25 year history with this asset class. Each year, we see that tenant balance sheets are getting more robust, with stronger sales performance and less credit risk. Large power center Real Estate Investment Trusts aren’t focusing on smaller opportunities in non-top 25 MSAs, but RockStep is. To see how that’s paid off, check out this case study!
Keeping Customers at the Center
According to a 2023 report published by Deloitte, retailers must continue to prioritize the consumer experience—and RockStep couldn’t agree more. Throughout our 25+ years of investment in this industry, we’ve seen a thing or two change; one priority that has never shifted for us: commitment to the communities we serve. It’s at the core of what we do, and now more than ever, it must be at the core of what retailers do in order to remain successful, competitive and profitable.
Power centers, in comparison to traditional malls and other retail locations, have a unique ability to draw consumers in and keep them there. Sometimes nicknamed “lifestyle centers,” these complexes bring together retailers that meet a range of consumer needs and wants in one convenient location. You can go to the gym, grab some groceries, pick up your prescription, find a new pair of shoes, sit down for a bite to eat, discover your new favorite outfit and more, all in one spot. The convenience of power centers sets them apart, and consumers keep coming back.
The Future of Power Centers
We remain confident that power centers are a strong investment choice, which is why RockStep Capital will continue to invest in retail properties like these in the coming years. Our goal is always to increase foot traffic and profitability, supporting the long-term growth of each property and the community it serves. While we can’t with certainty predict what the future holds, our experience-based knowledge will guide our (Rock)steps as we locate and restore properties across the United States. That’s the RockStep way!
To learn more, fill out the form below to download our Core Power Strategy investment document.