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CRE anchor tenant

Anchor tenant

An anchor tenant is your larger retailer who takes up a lot of floor space.

Being larger users, anchor tenants generally possess a strong covenant. Possessing a strong covenant, bringing feet and taking up a lot of floor space gives an anchor tenant fairly strong negotiating leverage with the landlords / property funds.

Line shops will generally wait until a landlord has secured anchor tenants before signing up on a new development or looking to renew their leases.

This negotiating leverage is further amplified by anchor tenants signing long leases with landlords. These long, creditworthy leases allow landlords to borrow against the leases. This financing is required for a) new developments, b) refurbishing existing centres or c) reducing the cost of debt to (property funds in order to) reduce rentals to tenants.

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