Grocery anchors get most of the credit. And they deserve it. A strong grocer drives visit frequency, validates the trade area and sets the commercial tone for everything around it. But anyone who has watched a well-located center underperform knows that the anchor is the starting point, not the finish line.
At Regency Centers, we think about the whole center from day one. Not just who anchors it, but what the shops around it say about the community it serves, and whether the physical environment gives people a reason to stay longer than they planned. That thinking runs through every property we acquire, develop and operate. The result is a portfolio that does not just fill space. It performs.
The Anchor Is the Foundation, Not the Finish Line
Q: When you're evaluating a potential acquisition or development, how much of your thesis is built on the anchor versus everything around it?
Chris Widmayer: The anchor tells us the center can work. It does not tell us how well. What we are really evaluating is the potential of the whole property: the merchandising gap the grocer creates, the shop-tenant demand that will follow, the retail environment that best reflects the community it serves, and whether we can build something the trade area does not already have.
When we look at a prospective acquisition or new development, the grocery anchor is the first gate we walk through. Banner strength, store volume, how the grocer performs relative to its own portfolio in that specific market. That is table stakes, a baseline rather than a thesis.
What we spend real time on is what the center can become. What categories are underserved in this trade area? What is missing? How do we create a place that is meaningfully differentiated from the competition nearby? Those questions drive the analysis.
That is where our proprietary DNA model comes in. Most buyers evaluate a center's current rent roll. We evaluate the trade area and the center simultaneously, two interlocking analyses that together tell us whether the demographics, the grocer's productivity, the merchandising mix, the physical access and visibility and the competitive landscape all align to support long-term NOI growth. The model scores 15 factors across both dimensions. It took years to build and is genuinely difficult to replicate without the transaction history and operating experience that inform how we calibrate it. By the time we close on a deal, we have a conviction-based view of the center's trajectory, not just its current income.
What We're Actually Building Around the Grocer
Q: Once a center is in the portfolio, how do you think about building the right mix around the anchor and maintaining it over time?
Andre Koleszar: Filling a bay and strengthening a center are not the same thing. We have a framework for this, but honestly it comes down to a simpler question: does this tenant make our other tenants better? That alignment is what drives great retail gravity and, ultimately, sales. If the answer is yes, we want them here. If it is no, we go hunting for the tenant who will.
Our Fresh Look program has three pillars: Merchandising, Placemaking and Connecting. All three are operating at every center, every day. On the Merchandising side, the filter is consistent: necessity, service, convenience and value. That applies whether we are leasing a 1,200-square-foot inline suite or placing a junior anchor.
In practice, that means a tenant mix that reflects how people actually live. Health and wellness. Quality food and beverage. Daily-needs services that cannot be replicated online. Value and off-price options that broaden the customer base. Entertainment and experience concepts that extend the visit. When you build that mix with intention, the center becomes something the community relies on rather than an errand stop they swing by occasionally.
We are also deliberate about how tenants relate to each other physically. A fitness studio placed next to a smoothie bar and a fast-casual lunch spot is not a coincidence. It is a sequencing decision. We think carefully about the customer's path through the property: what draws them in, what keeps them moving, what sends them to a second or third stop they had not originally planned. That kind of choreography takes time to get right, and it is one of the things that cannot be manufactured quickly.
Placemaking Isn't a Buzzword. It's How We Create Value.
Q: How does physical design and environment factor into a center's long-term performance?
Andre Koleszar: A center that feels good to be in is a center people come back to. That sounds obvious, but a lot of retail real estate is still underinvested in the physical experience. We treat the inviting environment as part of the leasing pitch, to tenants and to shoppers.
Our Fresh Look Placemaking work is about transforming the environment, not refreshing it. Thoughtful outdoor gathering spaces. Clear and intuitive wayfinding. Landscaping and lighting that signals to the shopper that someone genuinely cares about this place. These are not cosmetic choices. They directly influence dwell time, return visit frequency and the overall impression the center makes on tenants deciding where to open their next location.
When we look at a center's physical environment through a leasing lens, the question becomes: what does this place need to become in order to attract the tenant mix we have envisioned for it? What categories become viable when the experience is elevated? In many cases, a meaningful Placemaking investment opens doors that were simply closed before. It creates the condition for a better merchandising mix to exist.
That is a different way of thinking about capital investment in a shopping center. Many owners focus on maintenance and compliance. We think about what the physical product needs to become in order to attract the tenants that will drive the next decade of performance. That shift in frame changes the return calculation entirely.
Chris Widmayer: We evaluate Placemaking the same way we evaluate any other capital decision: what does it unlock, and what does the return look like at stabilization? It shows up in rent achievement, tenant retention and the caliber of operator we can attract. Centers that look and feel exceptional command better economics. That is not a soft observation. It shows up in the numbers.
The Retailers Coming to Us Right Now
Q: What does the current leasing environment tell you about the health of this format?
Chris Widmayer: Demand for well-located grocery-anchored space continues to exceed supply. New retail construction has been well below the long-term average for more than a decade, and we do not see that changing materially. That structural scarcity makes every high-quality space in a strong trade area more valuable than it was five years ago.
What we are seeing across the portfolio reflects exactly that. The range of retailers actively seeking space in well-located grocery-anchored centers has rarely been broader. Fitness and wellness operators want our centers because the co-tenancy and demographics support their model. Fast-casual and specialty food concepts are growing aggressively, following suburban populations that are spending more time close to home. Personal care and beauty, financial services, veterinary care, youth enrichment and pet-focused retail are all active and expanding categories. In these tenant segments, the physical store is not competing with e-commerce. It is the product.
Health services deserve particular attention. Urgent care, dental, physical therapy, infusion and specialty medical concepts have made grocery-anchored neighborhood centers a preferred real estate format. The demographics align well: established suburban households with insurance coverage and a clear preference for accessible, convenient care close to home. That is not a trend. It is a structural shift in how healthcare is being delivered, and well-located open-air centers are a primary beneficiary.
Andre Koleszar: The demand is real, but we are still selective. Having multiple tenants wanting your space is a good problem to have. Using that leverage to build a better center, rather than just filling it faster, is what separates good operators from great ones. We are deliberate and patient about it, holding out for the tenant who makes the whole property stronger, not just the one who signs first.
Near-record occupancy across our portfolio is a reflection of that discipline, compounded over years. It is also a function of being in the right markets with the right physical product and the right grocer relationships. Those things do not happen overnight, and they are not easy to replicate.
What Most People Miss About This Asset Class
Q: What is the most commonly misunderstood thing about what makes a grocery-anchored neighborhood center succeed?
Chris Widmayer: People sometimes treat this as a passive asset class: buy it, collect rent, hold. That misses everything. The centers that compound in value over a decade are the ones with active, disciplined owners who have a vision for what the property can be. That means creating a genuine sense of place, making the right leasing decisions year after year, reinvesting in the property when the market calls for it and staying close to what the community actually needs. Passive ownership produces mediocre results in any real estate category. In this one, it quietly produces centers that fall behind.
Regency's approach is built on the premise that great operations and great investments are inseparable. When we evaluate a deal, we are evaluating our own ability to execute on it: the Merchandising vision, the Placemaking investment required, the depth of our relationship with the anchor and the leasing pipeline we can bring to bear in that specific market. The integration of those capabilities is not incidental to our returns. It is the source of them.
Andre Koleszar: The other thing people underestimate is continuity. When you own a center for decades and operate it with a consistent standard, a clear point of view about what belongs there and why, the community comes to rely on it. That reliance is a form of resilience. It is what makes these assets hold their value through cycles that create real pain for other retail formats.
More than 60 years into this business, we have seen a lot of cycles. The centers that come out stronger on the other side are the ones where the anchor, the shop mix, the physical environment and the ownership all point in the same direction. That alignment is built over time, through thousands of individual decisions about who gets a lease, what a renovation prioritizes and which tenant gets the call when a space opens up. None of it is accidental. All of it is the job.
Chris Widmayer is Managing Director of Investments for Regency Centers. Andre Koleszar is a Managing Director of Operations for Regency Centers. Regency Centers is a preeminent national owner, operator, and developer of shopping centers located in suburban trade areas with compelling demographics. With more than 480 properties and over 60 years of operating history, Regency brings national scale and local expertise to every center in its portfolio.
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