Retail Development Due Diligence: How Market Analysis Revealed Better Tenant Alternatives

Sometimes the best deals are the ones you don't make.

A commercial developer had their sights set on what seemed like the perfect anchor tenant for a strategic property: a National Grocer looking to relocate to a larger site. On paper, it made sense. The grocer needed more space, the developer had the perfect location, and the deal could have unlocked significant property value.

But there was a problem. Several of the National Grocer's stores already surrounded the site. Would this location really work? Or would inadequate retail development due diligence lead the developer to spend months—maybe years—pursuing a deal that was never viable?

The Real Challenge: Moving Beyond Assumptions

Most developers rely on intuition and broker relationships when targeting anchor tenants. They identify a prospect, make the pitch, and hope it works out. When it doesn't, they've lost time, resources, and opportunity.

This developer took a different approach. Before investing heavily in tenant recruitment, they commissioned comprehensive retail development due diligence to answer one critical question: Could this site actually support this tenant?

The answer required more than surface-level demographics or traffic counts. It demanded grocery tenant viability analysis—sophisticated gravity modeling, competitive analysis, and performance forecasting that transforms speculation into strategy.

What the Data Revealed

The retail site validation process examined existing store performance, traffic patterns, customer demographics, and the competitive landscape. A proprietary gravity model assessed multiple grocery tenant scenarios, evaluating each option based on projected performance and long-term viability.

The findings were clear: pursuing the National Grocer wasn't just difficult—it was unviable. Market saturation and potential sales cannibalization made the deal fundamentally unsound.

For most developers, this would have been devastating news. Months of planning, relationship building, and negotiation preparation would have gone to waste.

But the due diligence didn't stop at identifying what wouldn't work. It revealed what would.

The Strategic Pivot: From One Target to Multiple Opportunities

With the National Grocer ruled out, the research team pivoted to identify alternative grocery retailers that would maximize the developer's returns. The analysis uncovered gaps in the competitive landscape—untapped demand that specific grocery formats could capture.

Two strong candidates emerged:

• A Specialty Grocer that aligned perfectly with underserved local demand
• A Discount Grocer positioned to capitalize on competitive gaps

Suddenly, instead of pursuing one questionable prospect, the developer had multiple viable alternatives—each backed by concrete performance projections and market intelligence.

The Negotiating Advantage

This shift created something even more valuable than tenant options: leverage.

Armed with professional revenue forecasts and market analysis, the developer could approach grocery retailers with evidence-based discussions rather than speculative pitches. The data transformed initial conversations from "Would you be interested?" to "Here's exactly why this site will perform for you."

That credibility accelerated the leasing process and strengthened the developer's negotiating position for favorable lease terms. When retailers see that you understand their business model and can demonstrate site viability with data, you're no longer just another landlord—you're a strategic partner.

The Broader Implications for Development Projects

This case demonstrates a fundamental principle in today's retail real estate market: thorough development due diligence prevents costly mistakes while uncovering hidden opportunities.

Developer market analysis delivered five critical outcomes:

1. Prevented resource waste on an infeasible deal
2. Identified overlooked opportunities matched to market demand
3. Accelerated tenant engagement through evidence-based positioning
4. Strengthened negotiating leverage with performance projections
5. Enhanced long-term property value through strategic positioning

In competitive retail environments, success often depends less on pursuing the most obvious target and more on conducting proper grocery anchor feasibility analysis to identify the right tenant fit for specific market conditions.

The Data Behind the Decisions: Want to see the depth of analysis that drives these strategic insights? We've made available a sample of the grocery sales forecast report that formed the foundation of this market analysis. It demonstrates how comprehensive market intelligence—combining demographics, traffic patterns, competitive presence, and performance modeling—transforms property positioning from guesswork into strategy. Download Sample Sales Forecast Report

Moving Forward Strategically

The retail landscape continues evolving rapidly. Store closures, format shifts, and changing consumer behaviors are creating both challenges and opportunities for developers.

Development projects that succeed in this environment share one characteristic: they conduct rigorous retail development due diligence backed by independent market intelligence rather than relying solely on intuition or outdated assumptions.

Whether you're evaluating grocery anchor feasibility, planning repositioning strategies, or validating development opportunities, the question isn't whether to invest in tenant viability analysis—it's whether you can afford not to.

Ready to discuss your development project's due diligence needs?

CRE 360 combines independent market intelligence with end-to-end transaction expertise, helping developers identify viable opportunities, validate tenant feasibility, and strengthen negotiations.

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