Co-tenancy is a common element of retail real estate.
Some retailers base their real estate strategy on being adjacent to an “anchor”—like a grocery store or Big Box retailer—that drives frequent and significant customer traffic.
Others only locate in shopping centers if complimentary retailers already occupy space.
Many retailer leases even offer a termination option —or a lengthy period of free rent—if designated anchor tenants vacate and/or are not replaced.
But while co-tenancy is common and widely accepted in the retail industry it has not extended to other property types.
Like automotive real estate.
At least not yet.
However that may change since the co-tenancy benefits that retailers enjoy also apply to automotive users.
For instance many car dealerships already cluster near each other in “auto malls”—in part to capture the highest volume of customers that travel to an area with a specific purchase in mind.
Other automotive uses may also benefit from co-tenancy.
Auto parts retailers such as AutoZone, Advance Auto Parts and O’Reilly Auto Parts are increasingly opening larger “hub” stores in part to stock more parts and locate them closer to commercial customers like collision centers and repair garages.
The co-location of auto parts retailers and auto service establishments may improve on part availability and delivery speed to commercial customers and make hub stores even more profitable.
Frequent “do it yourself” auto parts retail shoppers may also be more inclined to purchase other services in properties with automotive co-tenancy.
Like, for instance, a car wash.
One example of this co-tenancy in action:
A site in Mt. Pleasant, PA where AutoZone and Clean Express car wash operate conventionally sized units in a shared space:
A ~25,000 square foot Big Box building that was vacated by the Busy Beaver home improvement store in 2021.
The building was demised and now includes a standard ~6,500 square foot AutoZone store and a Clean Express car wash in the remaining space.
Automotive co-tenancy may not ever be as common as it is in retail real estate.
But co-tenancy may a core part of future automotive real estate projects.
Particularly by way of adaptive reuse and the repurpose of real estate.