Have you heard the one about the priest who walks into a vacant shopping center?
As retail’s struggles continue across the country, landlords have started to expand the types of tenants they look at to fill vacancies, and churches are now getting more consideration, according to the Wall Street Journal.
Shopping center owners generally considered religious institutions to be weak tenants, as they are usually not open all week, do not draw a ton of daily foot traffic and could be harder to evict they don’t pay rent. But the institutions can bring advantages with them as well, as they require less allowance for tenant improvement and can help shopping centers diversify their credit exposure.
At least 111 malls and open-air centers now have churches in them, according to an analysis of August 2017 data from the Directory of Major Malls, which tracks 8,200 retail centers in the U.S. At Grand Cities Mall in Grand Forks, North Dakota, there are three churches in the shopping center, and at the Outlets in Loveland, Colorado, the center leases 34,000 square feet to three churches and a synagogue.
“We’ve been delighted by that experience,” president and CEO of Outlets owner Craig Realty Group Steve Craig told the Journal. “I’m not saying that I’d do it for every property, but for this it makes a lot of sense.” [WSJ] – Eddie Small