Propmodo Daily

By Franco Faraudo · Feb. 1, 2024

Greetings!

For a while there, Walmart looked like it was on the ropes. They had lost the race for e-commerce dominance, paused their expansion plans, and had to close a few stores. But Walmart has made a strong comeback. They now have the financial resources to not only open or expand 150 stores but also invest billions in upgrading their existing locations with advanced technology and sustainability features. In today's Propmodo Daily, we will delve into Walmart's recent announcement and take a closer look at their real estate portfolio.

Also, today we are exploring the wave of increasingly stringent energy and decarbonization regulations sweeping through U.S. cities and states. Check out the article and interactive map highlighting the expanding landscape of building performance standards nationwide, along with potential penalties for non-compliance.

Now let's dig in!

Walmart Continues To Grow Its Real Estate Empire

Walmart is a retail giant. The company is still the largest retailer in the world by revenue, still bigger than Amazon by this metric (although it is getting close). The company has over 10,500 stores spread across the world, 4,622 of which are in the U.S. Walmart has the U.S. so well sprinkled with stores that around ninety percent of Americans live within ten miles of one of its stores.

But after the growth of e-commerce and the onset of the pandemic, Walmart decided to slow its expansion and even close some of its stores. That had many thinking that the company would be shifting its efforts to online retail, a verticle that still only accounts for around 15% of its total revenue. Walmart has expanded its online presence, but yesterday, it announced that they are not giving up on its brick-and-mortar growth.

Walmart now plans to open or expand 150 stores. This will be accompanied by more than half of a billion dollars of upgrades to stores that include energy efficiency and sustainability upgrades. They are also developing a network of charging stations that they hope will make EV ownership more accessible. Stores will also be adding technology to stores like “digital touchpoints” that will give shoppers information about products and services.

Walmart does not take new store openings lightly; they own almost all of their real estate, so making the wrong decision could be really costly. But buying their own land does have upsides. Often times there are sections of their parcels that are not developed to make the store and the surrounding parking. This became so common that Walmart hired CBRE and even built an interactive website to sell or lease dispositions of excess land sites and former retail locations. Walmart has also experimented with different types of development to complement its stores, like the Fort Totten Square apartments complex that it constructed over one of its smaller style stores in Washington, D.C.

Walmart is capable of changing entire towns with one of its stores. It has pointed to the jobs that it will create and the lower cost of goods it provides residents as a benefit to the retailer’s presence. But local store owners often object. Plus, studies have shown that housing costs increase near a new Walmart store. “Our estimates suggest that a new Walmart store actually increases housing prices by between 2 and 3 percent for houses located within 0.5 miles of the store and by 1 to 2 percent for houses located between 0.5 and 1 mile,” one study found.

Walmart continues its domination of the American retail landscape. They have found some success in smaller store formats, but they still seem more interested in opening Superstores that sell everything from apples to zip ties. Until America, tires of in-store shopping or another retailer grows a large enough retail presence to rival Walmart (I’m looking at you, Bezos), Walmart will continue to be the place where America shops.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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