Retail Landlords Put Faith In Houses of Worship

Churches and Religious Facilities are great alternatives uses to consider for a shopping center. Many of these congregations are well funded, have thousands of attendees driving foot traffic to the development and invest significant capital into upgrading their space. In addition, many of these church tenants have become more than just a Sunday spot for their members. Churches have evolved by adding more amenities, events, and services such as day care, food and beverage, bible study, self-help classes and fitness clubs which increases overall weekly trips. Expect to see churches continuing to be active whether acquiring former big box units or leasing space at shopping centers. Retailers traditionally have excluded church uses as a co-tenancy restriction in lease agreements, however, times have changed, and more and more retailers understand the need to be open-minded as it relates to churches as a neighboring tenant/use.

Since the end of the great recession, you have seen many church tenants expanding their footprint and taking advantage of vacant big-box space to enter markets and serve the local population base. Landlords have discovered that church uses can be a great tenant and realize that they can drive tremendous traffic to their shopping center and help support adjacent retail uses. Traditionally, they are signing leases or acquiring vacant big-box space and injecting significant capital into redevelopment, making a big commitment to the shopping center property and ultimately the community of which they are entering. A lot of times, these church tenants can be flexible and morph into the available opportunity. Grace Family Church acquired a former 63,000+ SF SweetBay in South Tampa, FL and redeveloped the property into a 40,000 sf church facility and 20,000 sf Thrift Shop. They certainly have sweet spots on square footage requirements but are not limited to a specific prototype and have proven to get very creative!

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