An outparcel, sometimes called a pad site, is a smaller, freestanding parcel of land located along the perimeter of a larger retail property, such as a shopping center or power center, and typically positioned near the main road frontage for maximum visibility. These parcels are often sold or ground-leased separately from the main center to single-tenant users like banks, fast-food restaurants, pharmacies, or gas stations that want their own building and dedicated parking. Because outparcels sit closest to traffic and offer strong visibility and easy access, they frequently command higher rent per square foot than space inside the main center, even though the buildings themselves are much smaller. Developers often use outparcel sales to help fund construction of the larger retail project, since pad sites can be sold to national tenants or developers at attractive valuations early in a project's life. For investors, outparcels can offer a lower-cost entry point into a well-trafficked retail corridor with long-term, low-management net lease income.
Further reading: New Opportunity: OKC Outlets
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