Info on Walmart “Shadow Centers”
I’m new to commercial real estate but I’m eyeing a property right next to Walmart and apparently these have certain rules as far as Walmart has a say in what kind of tenants can be approved? Anyone have more info about this or give me a site to find Walmart’s shadow center rules since one property I’m looking at apparently has a current tenant that is not supposed to be eligible
[{"id": "fe66st7", "text": "No noxious uses.  Basically, anything questionable, which can include tattoo parlors, CBD, even a place that sells alcohol for immediate consumption, will probably be prohibited.", "replies": [{"id": "fe675yb", "text": "Do you know if myself as the owner of the shadow center I have to ask for approval from Walmart each time I have a new tenant?", "replies": [{"id": "fe67ntf", "text": "Depends on the lease.  If the lease requires it, and honestly it probably does otherwise the real estate manager should have been fired, then you will have to get approval.  Many uses are allowed, but also many uses are not.  Probably not getting anything that sells fresh, no Dollar type stores, and no noxious uses.  Noxious sounds General?  That\u2019s the point.  It has no specific definition, so it can be anything they can argue it to be.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fe69si6", "text": "You need to order a title commitment for the property you are interested in purchasing. While this is a normal process of due diligence, if you want to find out prior to going under contract, order a \u201cpreliminary title commitment\u201d on the property. If your broker is any good he should be able to get a free one for you, but if not or you don\u2019t have a broker these can cost around a $100-$250. This form of title commitment will show you the exceptions which will include the recorded documents Walmart puts into place prohibiting other uses.\n\nI list a Walmart-anchored center and there\u2019s a large variety of restricted uses which I\u2019d say are made up of three main categories: Noxious uses such as the other comment describes, parking and visibility concerning uses such as churches, bowling alleys, movie theaters, etc., and competing retail uses such as \u201ca business which sells tires\u201d.\n\nThese uses change from center to center as these restrictions are typically negotiated by the overall developer (if Walmart was joining a large, master-planned center and negotiated for exclusives), or put in place by Walmart at their leisure (if Walmart purchased excess land and encumbered that land themselves).\n\nI\u2019d likely disagree with the other comment in that the lease with the tenant is critical. Unless the tenant switched their use halfway through their lease, the landlord is likely at fault for leasing to a restricted use and both Walmart and the tenant may have a claim against the landlord (tenant if the landlord made representations the use was acceptable). For anything like this a good CRE attorney is a must!\n\nIn regards to your question about asking approval every time, no you do not in my experience. Anything questionable it may serve you to ask as no one wants a legal battle with a heavyweight!", "replies": [{"id": "fe8esf9", "text": "Not OP. But you\u2019re a G for helping out. Also, perfect username.", "replies": [{"id": "fe8kzep", "text": "Thank you, I really appreciate it! \n\nFor a slightly boring backstory on the username, I was within my first six months of brokerage when I sat down to discuss site selection with the acquisitions director of a leading development firm in my market. The gentlemen was clearly having a fun time showing my very green self just how knowledgeable he was and introducing me to some of the more complex parts of brokerage. We ended up meeting for an extra hour then planned as he taught me a number of important lessons about brokerage (having been a broker himself prior to his current position) and he kept telling me how his perspective on a site would differ from mine via \u201cif I put my broker/developer hat on...\u201d\n\nWas my first time meeting with a *real* pro in this industry and it stuck with me - hence the name!!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]