Buying A Strip Mall
Shopping Centers can be a great asset class to invest in if you understand the fundamentals and choose your properties wisely. The following training provides extremely valuable advice on what every beginner needs to know before they embark on investing in a shopping center. You'll discover an overview of the different types of shopping centers, the 4 critical aspects of shopping center investment you must know, the 3 most common leases, the power of triple net leases and some guiding principles to follow when you invest in shopping centers. Prepare to be enlightened on this commonly seen yet rarely talked about asset class. You may never look at those strip centers you frequent the most the same ever again. Here is a very powerful training on shopping center investing for beginners:
buying a strip mall
Retailers of all sizes have been affected by the explosive growth of e-commerce, especially chain retail stores. The closure of anchor stores has dragged down surrounding businesses, sparking a major decline in large shopping malls. This has led many small businesses to turn to retail strip malls in urban and suburban areas, creating new opportunities for real estate investors.
There are many advantages to investing in strip malls. They can provide steady income over many years, and choosing a diverse set of service-oriented businesses can mitigate risk exposure. One of the key advantages to strip malls is the relative reliability of tenants, compared to residential tenants. Commercial tenants often sign multi-year leases that allow you to better guarantee the profitability of your investment.
As one of the property types that has withstood the challenges of the pandemic, strip malls remain a good investment opportunity. With larger malls closing or reimagining themselves as destinations providing luxurious shopping experiences, smaller businesses that would struggle to compete in a mall find the visibility and potential traffic offered by a well-positioned strip mall to be very lucrative.
Are strip malls a good investment? If you invest in the right location, attract the right businesses, and are responsive to issues with the property as they arise, a strip mall can be a successful and consistently profitable addition to your commercial real estate portfolio.
If you find an attractive opportunity to invest in a strip mall, you may need to act quickly. Socotra Capital provides fast, flexible financing options for real estate investors of all types. For more information about how to fund investment opportunities, read, How to Grow a Passive Income Portfolio in Today's Market.
So, if you are interested in investing in strip malls and need to secure proper financing today, click the link below to book a free strategy call with us at LendCity and we will help you get started with a lender who has experience investing in strip malls.
If brick and mortar retail is in turmoil, why even think about investing in a strip mall? Well, if you have the capital and expertise necessary to derive profit from a commercial investment, consider these following benefits:
As bastions of local retail, strip malls often host important types of businesses within the community. Strip mall anchor tenants often include grocery stores, big-box discount stores and more. While retail may be changing, people will continue to shop at these anchor tenants, regardless of economic conditions.
Before buying a strip mall, perform a lot of research on your local market and sub-market, and make sure a strip mall is the right type of purchase for you. There may be other retail opportunities available in your area, representing more lucrative purchases.
If you do opt to invest in a strip mall, consult with other local investors that also hold strip malls in their portfolio. They can provide you with valuable insight into the best ways to make your new investment profitable and reap the best possible returns on your purchase.
The brick and mortar retail industry might be down right now, but people will always need a neighbourhood store to shop at. Securing yours as part of a strip mall investment is one of the best ways to anchor your portfolio. Best of all, your competition is low right now, since the commercial real estate industry has a short.
Once again, if you are interested in investing in strip malls and need to secure proper financing today, click the link below to book a free strategy call with us at LendCity and we will help you get started with a lender who has experience investing in strip malls.
Troy Applegate, head of commercial mortgage lending and commercial banking at JP Morgan, noted in recent commentary that strip malls have been high performers throughout the COVID-19 pandemic. Strip malls remain a viable asset class for investors, either through the direct purchase of commercial properties or through real estate investment trusts (REITs).
Investors looking to add commercial properties to their portfolios should focus on buying properties in densely populated residential areas, Applegate wrote. Despite the proliferation of online shopping and e-commerce, shopping centers in suburban and urban neighborhoods remain vital components of their surrounding communities.
The problem with investing in shopping centers and other commercial properties is the high barrier to entry that exists. It takes a lot of capital to acquire and maintain a strip mall. However, investors hoping to add shopping centers to their portfolio can do so indirectly by investing in a REIT.
Over the years, R.J. Brunelli & Co. has performed regional retail vacancy studies, most recently examining over 25 million square feet of strip center space in Northern and Central New Jersey. Through first-hand observations of hundreds of properties in New Jersey and discussions with fellow brokers in other parts of the country, 10 primary causes of strip center development failure have been identified. Significantly, most of these pitfalls can be avoided through proper planning and leasing. These common pitfalls and the measures that can be taken to work around them are outlined as follows:
Unfortunately, most small chains and mom-and-pop retailers do very little advertising. Therefore, the visibility of their storefronts and signs to the street becomes their most important presentation to the public. Developers saddled with a retail property that lacks good visibility are advised to create an on going advertising program with the tenants to let consumers know what products and services are being offered at the center.
Perhaps in the snowbelt states, where the winters are especially bitter, consumers may appreciate a small center with a climate controlled mall area. But in the more typical US climate, experience has shown that consumers visiting a small center prefer to park as close as possible to the entrance of the stores in which they intend to shop.
After the developer proudly announces that every last square foot possible has been squeezed out of the planning board, he or she finds a broker who delivers the bad news: In small strips the typical store size needed is 1,200 to 2,000 square feet. Because the minimum frontage that most stores can live with is 20 feet, it becomes impossible to deliver stores less than 2,000 square feet when more than 100 feet of depth exists.
Small strip centers that are convenience-oriented can usually work well if four rows of parking are provided between the storefront and the street. This scenario creates a setback of about 160 feet, however, sometimes only two rows of parking are necessary. Although exposure considerations may override parking considerations, a configuration with only one row of parking across the front, and the a balance of parking at the sides and the rear, should always be avoided unless the center is a home-furnishings center, for example, where a very low parking requirement is necessary.
1. Stand alones, operators are less likely to be pushed out by the landlord to utilize the space for something else.2. Stand alones, operators are less likely to get foot traffic like a strip mall would (which can be good or bad).3. Stand alones, operators have a better chance of buying the property, since it may cost less than acquiring a strip mall.4. Stand alones, rent increases may be less drastic.
A building you own will always be best. Whether thats a stand alone or in a strip mall. For arguments sake, lets say you own both, a stand alone and a strip mall. Which is better? That depends on the other businesses in the strip mall and access to good parking. Try and stay away from liquor stores and bars, they can be trouble neighbors, at least thats my experience with them.
Have you ever noticed that when a Walmart is built that other businesses will build nearby or in the out lots of that Walmart. These other businesses share the same customer as Walmart, same demographic. So if Walmart builds, they build. So if your strip mall has ample parking, a good demographic and other businesses that share that same demographic, it can do really good. They can all feed off of each other and help each other.
The small retail strip on 1.1 acre of land would be turned into a parking lot to accommodate 200 parking spots. The property is located west of the intersection of Birchwood Avenue and North Highland Avenue within a mixed use residential and commercial area of Upper Nyack.
The southwest valley is perhaps the fastest-growing area of Las Vegas, and as Krigsman sees it, the mall is poised to get plenty of foot traffic, despite the struggles faced by brick-and-mortar retail.
The shopping area that was once home to electronics big box Best Buy now has an intriguing mix of retailers. DSW, Designer Shoe Warehouse for those out of the footwear sales loop, and Michaels, a craft store, have opened in the now-renovated building with TJ Maxx, a mall fixture for nearly 30 years.
As small businesses grow, they often look at commercial real estate locations such as strip centers to establish a new brick-and-mortar presence. This situation can create enormous opportunities for individual partners to invest in the construction of new strip malls and retail shopping centers to support the needs of businesses in the area. 041b061a72