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Line shop CRE

Line shop

A line shop is a type of retail tenant, generally found in a shopping center or mall.

These are the shops that live adjacent to a shopping center’s anchor shops.

Line shops are categorised by tenant quality into either a) nationals or b) “mom and pop”. National tenants generally carry better covenants – i.e. are financially stronger, with lower risk of defaulting on tenant commitments.

A line shop generally carries a disproportionately higher share of the rental. This is due to a couple reasons – the most significant being

  • Anchor tenants “attract feet”. That is, they attract customers who bring business to the line shops
  • Anchor tenants’ rentals are low, and so a landlord (or property fund) needs higher rentals square meter rentals to achieve a higher blended rental across a shopping centre to “make the numbers work”

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