LOS ANGELES—The niche world of dollar stores is booming, with new brands penetrating the market and strong consumer traffic. For small shopping center owners, these stores have become a coveted tenant and driver for consumer traffic. To find out what is driving demand for dollar stores—from both the investor and customer perspectives—what this means for the market and how other retailers are reacting, we sat down with Sagiv Rosano, president and founder of Rosano Partners, and Sam Kangavari, SVP of the retail services group at Rosano Partners, for an exclusive interview. Here, they tell all about the sector.

GlobeSt.com: What is driving the increased demand for Dollar- and 99-Cent-type stores?

Sagiv Rosano and Sam Kangavari: There are a few elements driving this demand in California. First are new entrants in the market. Traditionally, California's only dollar-type stores were Dollar Tree and 99-Cent stores. Recently, both Family Dollar and Dollar General have entered this market, and other discount brands continue to seek opportunities to move into the state. California's markets are attractive for these retailers, based on both the density of the state's population, as well as local governments' support of these retailers. Cities love dollar-type stores. They are good tenants, and they serve the community with affordable retail offerings.