United Commercial Realty
UCR Gets Top Honors in Best Real Estate Deals of the Year
Best Commercial Deal of the Year - Aldi's Initial North Texas Rollout2.25.2011- Dallas Business Journal
When ALDI decided to move into the North Texas market, it did so with a major wave of stores in mind. Less than five years later, the Illinois-based ALDI has built a 500,000-square-foot distribution center in Denton and 29 stores in the region, with three more set to open.
Stan Lotridge, executive vice present of United Commercial Realty, served as master broker for the large project and also worked on the planning process. Before they started shopping for store sites for the new ALDI Food Markets, Lotridge and his clients conducted in-depth market studies to determine optimal locations for the unique concept behind the chain’s marketing strategy.
“We actually helped them analyze and determine the different trade areas” where the ALDI concept would work the best, Lotridge says. “We began the initial site program 4˝ years ago when we first started looking at the market.”
The project, which was launched at the tail end of a growth market, ran into some of the vagaries of the economic downturn that swept into town during the second half of 2008. The recession didn’t set back the project, but it did create some new challenges.
Although some sites involved new construction on vacant land, other stores were located in existing facilities and Lotridge says, “We had a number of properties change hands due to foreclosure in the middle of negotiations, so we would begin talking to one landlord and then have to change directions when another party took possession.”
Because of the impact the recession had on real estate prices, Lotridge said it was important to track the market and be aware of how properties were being valued.
Although the first wave of ALDI’s Texas stores have opened, Lotridge says the project has not slowed.
“We actually have not stopped looking ... We have a number of stores under construction and are negotiating more locations.”
Heather Rimmer, who works with Karla Waddleton directing ALDI’s Texas real estate operation, says the company’s target demographics are very broad, essentially including all price-conscious grocery shoppers. She said the company’s key interest is, “just pure the volume of people” in a market area.
ALDI is focused on developing stores within about a 100-mile radius of its Denton distribution center. With locations open in communities ranging from Burleson to Plano, Rimmer says, “We just want to represent ourselves across all the markets across the Metroplex.”
Rimmer says the ALDI concept can be described as a select assortment discount grocery store. The company, which has more than 1,100 stores in 31 states, focuses on offering select lines of grocery items at discount prices in a space that is more comparable to a Walgreen’s than to a modern supermarket.
“We can provide about 95 percent of what one of our shoppers might need from a supermarket,” Rimmer says. “Everything ALDI does is designed to help people stretch their grocery dollars, but it’s also the convenience of the size without a lot of the fluff.”
ALDI seeks lease sites with about 18,000 square feet or land purchases of about 2 to 2.5 acres. By narrowing its selections to most-wanted items, Rimmer says ALDI is able to operate stores requiring less space and a smaller workforce, making it easier to control costs.
So far, Rimmer says, the North Texas market has responded well to the ALDI concept.
“We’re very pleased with every opening that we’ve had,” she says. “We’ll continue to keep pumping stores out as quickly as we can.”