Seizing Opportunity: How We Scaled our Walmart Shadow Center Strategy
While others perceived small towns as a risk, MRP had a thesis based on our lived experiences that small towns were home to a valuable untapped asset class. This foundational strategy of investing in Walmart shadow centers across small towns nationally has proved extremely successful. The key to this strategy lies in the resilience of these communities. Regardless of economic conditions, the people of small towns will continuously show up to buy essential goods and services.
What makes our communities so resilient? It’s all in the factors we look for before we invest our capital and time into a property:
- The trade area buys essential needs within their community
- Essential services businesses as the bread and butter of our centers
- Essential services stay strong even through recessions
- There’s no competition nearby (within small towns, we always choose the centers positioned for highest traffic)
A Head Start
This asset class, clusters of retail space in small towns, has been long overlooked because of the traditional measures used in commercial real estate. Expecting traffic from a five mile radius may work in metropolitan areas, but the shopping centers of rural areas pull people from much further distances, as far as 60 miles away. These regional hubs attract people looking to accomplish errands such as haircuts, grocery shopping, and other essentials. The Walmarts near our shadow centers strategically all have over 2 million visits annually and make $100M + annually. These shopping centers are the main option around which means more traffic.
With the increasing data available, small-town America has become a hot-topic in retail, attracting more big-brand tenants. Because MRP already figured out not to trust a ten mile radius, we uniquely positioned ourselves with a head start in building relationships, expertise, and presence in small towns. The data supports our overall strategy, allowing us to optimize our processes and attract more tenants. We buy centers with strong fundamentals, and the improvements we make including property improvements, attentive leasing relationships, and vacancy filling are the cherry on top that allow us to attract better tenants, increase traffic for each tenant, and maximize our investment over, in some cases, a very short time.
Where to Next?
Through our extensive work in small towns across the nation, we have pinpointed almost 1800 resilient and profitable communities with Walmart Shadow Centers where we envision growing our MRP presence. Due to our established relationships and expertise within these communities, we have a strong foundation for strategic expansion initiatives.
MRP Capital Group is the largest owner of Walmart-anchored shadow centers in small-town America with 100 centers across the country. Our team is excited for the growth this strategy will bring, for MRP, for our tenants, and for customers in small towns. We’re just getting started. We truly have the experience and the data to show that we can repeat our process across any property that meets our criteria. There’s so much more to come