My daughter rents in Austin. She loves shopping at Whole Foods Market.
Before she upgraded from her college-area apartment to a nicer place near where she worked, one thing was very important: Whole Foods had to be nearby. She was leaving an area where one was a few blocks away. And to her delight, one was near her new place.
Having a premium grocer, such as Whole Foods or Trader Joe’s, is important to renters. And now, we know it can be really important to landlords as well.
A newly released RCLO report found that having either a Whole Foods or a Trader Joe’s within a multifamily development enables landlords to charge, on average, 5.8 percent more for rent than comparable apartment communities in the immediate area. Other premium grocers earned a rent premium of 3.3 percent.
“The presence of a ground-floor premium grocer has a meaningful impact on apartment performance, measured in terms of rental rates and lease-up pace,” the report said. “Brand cachet, particularly among Millennials who have been the primary target market for most new apartment buildings, is clearly important, as properties containing a Whole Foods or Trader Joe’s on the ground floor are able to achieve the highest rental rate premiums.”
RCLO’s report was based on 64 apartment communities in 20 metropolitan statistical areas. Each contained a premium grocer on the ground floor. Whole Foods occupied 31 of those spaces, Trader Joe’s 15 and other premium grocers, including Sprouts Farmers Market, split the rest.
In Dallas, The Armstrong at Knox Trader Joe’s was included in the report. The 165-unit complex at 4525 Cole Ave. has a Trader Joe’s on the ground floor. The complex, which is in the Knox-Henderson area, has a rental premium of 11.8 percent, according to the report.
Two Uptown apartments have grocers on their bottom floor but weren’t included in the report. Whole Foods occupies the ground floor of the 239-unit Gables McKinney Ave apartments at 2500 McKinney Ave. A 60,000-square-foot Tom Thumb is on the bottom floor of The Christopher apartments at 2323 N. Akard. Both grocers are listed in the apartments’ list of amenities.
RCLCO performed a similar study in 2016 and found a ground-floor Whole Foods earned a 4.3 percent premium, and a Trader Joe’s generated only a 3.2 percent.
All this updated info is good to know if you plan to move into an apartment and have a hankering for Trader Joe’s gluten-free Roasted Seaweed or 365 Whole Foods Market Organic Dark Maple Syrup. Just push the first-floor button on the elevator.