A Landlords primary responsibility is to ensure the presence of a paying tenant. Unfortunately for many “big box” owners, the recession has left plenty of space empty; with slim chances of new tenants filling it. There is simply little interest in the cavernous lots so many feared would dominate the landscape. Retailers are demanding tighter, more economic space and landlords are responding by cutting up their “big boxes”, meeting the needs of retailers and creating new opportunities for net lease investors.

It is no secret that retail has suffered heavily since the recession. In its wake, a movement has emerged known as “right-sizing” which places a focus on frugality and sustainability. This trend has traditionally been popular with smaller retailers such as Dollar General but is now even catching on with retail giants such as Wal-Mart and Target. Both are testing smaller floor plans as they move into more urban locations and cater to scaled back consumer demands. Such developments slim the chances that vacant big-box space will fill quickly and has forced landlords to “de-box”.

Net lease investors should be intrigued by this trend because many of the tenants positioned to make use of these smaller lots are usually triple net leased. Dollar stores, such as Dollar General, Family Dollar and Dollar Tree, all have plans for expansion this year and are prime candidates to occupy the de-boxed space. Other possibilities include auto-part stores such as Advance Auto and AutoZone and certain restaurant tenants. Though not the ideal of full market recovery, this development highlights market movement and movement is a good thing.