Benefits Of A Small Shopping Center
When you are looking at shopping centers, bigger is not necessarily better. While a well-run regional or super-regional shop- ping center can produce a good financial return, so can a successful small-market shopping center. In many cases, the small town center can turn out a better return.
Good Customers and Stable Tenants
In a small town center (10,000 to 100,000 people within a 5-mile radius), there is usually little tenant turnover. The tenants are attuned to shifts in the local economy and can be flexible when economic change occurs. The stores in the small-town shopping centers have a stable business because they concentrate on basic necessities (food, clothing, dry cleaning services, etc.), thereby insulating themselves from economic downturn which can often spell disaster for merchants of luxury items.These centers can also benefit from the nature of the customers. They are loyal and want to help their neighbors, who are often the store owners. Further, the small-town shopping center is viewed as a community asset. It can be where community activity takes place the July 4th parade forms there, band concerts are held there, holiday promotions are celebrated there. For investors, these community events bring additional traffic and sales.
The Successful Center
A small-town shopping center needs “hands-on” investors who carefully plan the investment.
known grocery chain, with at least 10 years remaining on its lease. The remaining store tenants should offer prod- ucts or services in special demand in this particular locale. Sporting goods, for example, usually are popular in small town shopping centers. Expensive jewelry stores typically are not. While electronics, games, department stores and clothing stores generally attract customers, sophisticated and costly gift shops do not.
Revitalize The Center
After about ten years, a small-town shopping center may need something to revitalize it. Expanding the center with a national retailer might help invigorate the tenant mix.Enclosing an open mall can be a good renovation to attract new interest. Simply giving the shopping center a face-lift might insure its dominate role in the area.
A high percentage of speculative low-rise industrial buildings today are flex buildings. Developers are favor- able toward the flex building as it will meet the needs of many modern sophisticated industrial building users.
The flex building is a single or multi-tenant building that will accommodate different amounts of backroom and office needs, depending on particular tenants’ needs. The developer finishes the exterior of the building, the interior remains only partially completed until the tenant signs the lease. The interior is then customized to provide space which might be for light manufacturing, research and development, warehouse and distribution, sales and accounting, or inventory control office space.
Because the flex building is attractive to a wide variety of tenants, the speculative builder can expect to find:
Lower construction costs. The staged construction will eliminate costly and time-consuming rip-outs of already installed interior spaces that will not meet the needs of a tenant. Later expansions of tenant spaces are easily handled (at lower cost) because of the flex design features.
Legal Definition Of A Shopping Center
We have all kinds of shopping centers from the smallest strip center up to the super centers. In a case in a federal bankruptcy court, the court was required to distinguish between a “shopping center” and other types of retail prop- erties.
The federal bankruptcy code did not define the term. The Third Circuit provided the following 14 elements to be used in determining whether a property is a shopping center.
Investors in real estate may have become fixed on one type of commercial property. There are a wide range of opportunities out there. Commercial properties provide space for businesses, and the kinds of properties are as diverse as the businesses.
Following are the major categories of commercial properties:
Light Industrial. Buildings that cater to storage users.
Heavy Industrial. Buildings that cater to manufacturers.
Your InvestmentSuccessful commercial properties give their users what they want and what they need. Some properties can be upgraded by renovation and a change to a different use. For example, an old industrial building can be converted to a retail or office property.
The Type Of Buyer For Commercial Property
When we represent a seller of a commercial prop- erty, we try to determine, as soon as possible in the marketing process, what type of buyer is most
Types of Buyers
The seller’s agent will appeal to the special interests of each of the three types of buyers. Advertising and marketing materials should develop each appeal and furnish supporting facts, realistic projec- tions, and professional information.
For the speculator-buyer, the stress is on the poten- tial for a resale profit. We might show that the property is in the line of future development (new public transportation is planned or being built, or there are other newly built or renovated commercial properties as neighbors). Demonstrate that the prop- erty is in a growing, vital locale.
Since income is of only a secondary interest to the speculator-buyer, we’ll go no further than the current income status. The focus will be on the potential for profitable resale.
The location will be of greatest interest to the user-buyer. Is it right for the user’s business? Is the building in good physical condition, or must it first be remodeled, improved, or up-dated? We must demonstrate the wealth and habits of the surrounding population. With each type of potential buyer, the marketing effort will focus where it is most likely to produce a prompt, successful sale.
Real Estate Investment Consultants
Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market.
With increased competition, the market place is becoming more complicated. As your professional commercial real estate advisors, we are in the position to represent you in real estate transactions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
Feasibility studies are essential for commercial office, industrial, resort and hotel investors. With this kind of information, planning is better and there is less chance for error. Real estate investing is not just the structure and the land. It is investing in the type of property that you want at the price and terms that suit you at the time you want to make the purchase. We can be your consultants.