Busy or slow, state liquor stores matter to retail centers

What’s the real estate impact of a state wine and spirits store?

For the West Shore Plaza in Lemoyne, the Pennsylvania Liquor Control Board’s store No. 2102 is an integral tenant because it’s high volume of foot traffic draws people in and that helps surrounding tenants.

“Between them and Karns, they are the two major draws, and that makes the rest of our center successful,” said Rick Jordan II, CEO of Smith Land & Improvement Corp., owner of the center.

The plaza liquor store was the busiest in Central Pennsylvania and one of the top 20 busiest stores in the commonwealth last year with $12.5 million in sales, according to the PLCB’s annual report.

On the flip side, there are many PLCB stores across the commonwealth that do less than $1 million in annual sales — some even less than $300,000.

However, high and low volume liquor stores are equally important to the success of neighboring tenants and landlords, several midstate real estate professionals said.

“Smaller traffic rural stores, while not hitting high sales, still serve a customer base, albeit a more rural, less dense population,” said Robin Zellers, president of NAI CIR. “The security of having a strong credit tenant remains but may not drive the strong customer traffic — purely on the demographics.”

If these stores weren’t desirable, landlords wouldn’t compete for the PLCB as tenants, he added.

That could change if the state system was fully privatized in Pennsylvania and the PLCB no longer had a monopoly over the stores. Under the recently adopted Act 39 liquor reforms, many retailers have begun to sell wine, but the PLCB is still controlling that inventory.

“A landlord is virtually assured that a PLCB retail presence drives traffic, of course as long as an appetite exists for wine and spirits, and I don’t believe anyone anticipates that appetite going away,” Zellers said.

The PLCB stores also are usually quite large in comparison to the rest of a retail center, said Blaze Cambruzzi, COO of Rock Commercial Real Estate LLC. So that higher rent payment can help make up for other smaller openings that may exist in the center.

“You might get four tenants in one bite (with the PLCB),” he said.

The PLCB is a reason to routinely stop in a center, which then makes it more likely that a shopper will take notice of neighboring retailers, he said. “It brings net in-bound traffic. And when you need your service business, you’re more likely to go there.”

In addition, the PLCB store, even though it’s selling alcohol, doesn’t limit the landlord’s ability to have another alcohol-related business in the center. By contrast, competition would hurt a salon or burrito restaurant in the same plaza. 

The West Shore Plaza has more than 8,000 square feet available that Jordan said he would like to see leased by a brewpub or a similar concept.

“We are interested in that. We’re constantly looking for opportunities,” he said.

Jason Scott
Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin and Cumberland counties. Have a tip or question for him? Email him at jscott@cpbj.com.

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