Even in tough economic times, non-discretionary and needs-based spending has remained resilient. While consumers are buying fewer luxury and discretionary goods, they continue to frequent retailers such as grocers, pharmacies, banks, nail salons, barber shops, dry-cleaners, value-oriented restaurants and discount retailers that are focused on meeting their daily needs. We believe a necessity-oriented portfolio, consisting primarily of neighborhood and community shopping centers, provides more stable income streams, cash flows, and lower risk relative to other retail property types.
Targeted shopping centers will have stabilized occupancy levels, well-performing anchor tenants that are recognized nationally or regionally and limited near-term lease rollover. Additionally, targeted centers will have functional layouts, strong locations within the submarket and will be of quality construction.