When considering real estate investment options, retail spaces tend to be overlooked for other choices such as office spaces or multi-rental spaces. However, businesses are a necessary part of every neighborhood and they would need space to be able to sell their wares and services.
In this article, the team from Sapphire Capital Investment will be breaking down how and why you should invest in the premier retail space, strip malls.
Why should you invest in a strip mall ?
Strip malls are a great investment for a number of reasons. First, they tend to be located in high-traffic areas, which means that there is potential for a lot of foot traffic. Secondly, strip malls typically have a variety of stores and businesses, which can provide a steady stream of income. Finally, strip malls are often easier to manage and maintain than other types of properties, making them a good choice for investors who want to minimize their workload.
If you’re interested in investing in strip malls, there are a few tips and tricks that can help you get started. First, it’s important to do your research and identify potential properties that fit your investment criteria.
Looking back at recent years, we have to consider the effect the pandemic has had on most businesses. There is a common perception that Covid-19 caused many retailers to close shop. Businesses are also implementing internet-based models into their policies. One might argue that investing in this form of commercial real estate isn’t ideal.
However, this is not the case. Strip malls focused on offering services and fast-flowing goods weathered the storm in 2020 and 2021.
If investors were able to perform well through the height of the pandemic, these are the signs of stable and ideal investment. Should you choose to explore this form of investment, you will need an experienced partner by your side.
Get in touch with the property specialists at Sapphire Capital Investment.
How to invest in strip malls ?
As an investor, you’re always looking for new opportunities to grow your portfolio. With the current state of the economy, many people are turning to investing in wholesale properties as a way to make money.
But what exactly is a wholesale property? And how can you get started investing in them?
Here’s everything you need to know about wholesale properties and how to invest in them.
A wholesale property is a piece of real estate that is sold below market value. This could be because the property is in need of repairs, or it may be a foreclosed home that the bank is trying to sell quickly.
Investors can then turn around and sell the property for a profit, or they can rent it out and generate income that way.
So how do you get started investing in wholesale properties?
The first step is to find a good deal. You can start by looking at foreclosure listings or working with a real estate agent who specializes in finding undervalued properties.
Once you’ve found a property that you’re interested in, the next step is to negotiate a purchase price with the seller. This can be tricky, as you’ll need to low-ball them in order to get a good deal.
Once you’ve agreed on a price, it’s time to close the deal and start making money!
Is a strip mall a good investment ?
The nation can’t seem to get enough warehouse space to store all the stuff we buy. Plus, with global supply chains still broken, big inventories have become a merchant’s lifeline. 2 (tie). Strip malls: Community shopping centers rose 14% in the month and up 25% in 12 months. The segment ranks No. 5 and is 6% above pre-pandemic level — seventh-best. Today’s neighborhood shopping hubs don’t really sell many goods that pass through all the new warehouse space.
This jump in values is much more about consumers finally coming of the surrounding neighborhood. The International Council of Shopping Centers (ICSC) defines three broad types of retail shopping centers : General Purpose Center: A general purpose shopping seeks to be “one-stop shopping” by offering a wide variety of tenants and products. Think shopping malls, community shopping centers, and strip malls. Special Purpose Shopping Centers: A special purpose shopping center is built to serve a specific audience and the tenants may fall within a particular category. Examples include power centers , lifestyle centers, outlets, and other themed shopping centers.
As an investor, you should always be on the lookout for new opportunities to grow your portfolio. With the right property, a strip mall can be a great investment. Here are a few tips and tricks to help you get started in investing in wholesale properties:
Research the market: When it comes to any type of investment, research is key. You’ll want to take a close look at the demographics of the area where the strip mall is located. Are there enough potential customers in the surrounding area to support the businesses in the strip mall?
It’s worth looking at the value proposition of strip malls to understand the proper approach. If you’re a real estate professional looking for advertising and growth opportunities , click the learn more button below.
Any strip mall you’re considering acquiring should be easily accessed by people travelling to and from work and home. If you’re off the beaten bath—meaning people have to go out of their way to find your asset—it’s a bad purchase.
Purchasing without an anchor lease. The beating heart of any strip mall is its anchor tenant. These tenants tend to be grocery stores and drug stores. If there isn’t a longstanding tenant signed up for a long-term lease in a strip mall you’re thinking about buying, you’ll have to seriously reevaluate your decision to purchase. Hosting too many satellite tenants
How do I invest in a shopping center ?
You may be wondering how to get started investing in a shopping center. The first step is finding a motivated seller. There are a few ways to do this, but the most common is through MLS listings or online marketplaces.
Once you’ve found a motivated seller, the next step is to negotiate a contract. This can be done by working with a real estate agent or broker. Once you have a contract in place, you’ll need to find a buyer for the property.
The best way to find buyers for your wholesale properties is through online marketing. You can use platforms like Facebook, Twitter, and Craigslist to reach a wide audience of potential buyers.
Why is a strip mall called a strip mall ?
The term “strip mall” is most likely derived from the fact that these malls are usually built on long strips of land. This type of mall typically has a number of stores or businesses, each with its own entrance and parking area. The store entrances are often located along a sidewalk, which is sometimes called a “paseo.”
Strip malls are usually built to accommodate a variety of businesses, including retail stores, restaurants, service businesses, and office space. They are often located near other types of shopping centers, such as supermarkets or department stores. Strip malls may also be located near residential areas, making them convenient for shoppers who live nearby.
Strip malls are typically built with a variety of stores and businesses, which can make them a convenient one-stop shopping destination for many consumers. However, strip malls can also be a source of traffic congestion and noise pollution. If you are considering investing in a strip mall, it is important to research the location carefully to ensure that it will
What is the average size of a strip mall ?
The average size of a strip mall is around 100,000 square feet. However, there are some that are much larger, such as the one in Las Vegas that is approximately three million square feet.
When thinking about investing in wholesale properties, it’s important to consider the location. For example, a property in a rural area is going to be less expensive than one in a major city. However, there are also some risks associated with investing in rural areas, such as a lack of potential tenants.
It’s also important to consider the type of property you’re interested in. For instance, an office building is going to be more expensive than a retail store. However, an office building will also have the potential to generate more income.
Once you’ve considered these factors, you can start looking for wholesale properties. There are a few different ways to find them, such as online listings and through real estate agents.
When you find a property that you’re interested in, be sure to do your due diligence. This includes things like checking out the property in person, getting a home inspection, and speaking with the current owner.
Once you’ve found a property that you’re interested in and have done your due diligence, it’s time to make an offer. Be sure to negotiate a fair price for the property, as this will help you make a profit when you resell it.
Following tips will help you get started in the world of wholesale properties:
– Location is key. Look for properties in areas that are growing or have potential for growth.
– Consider the type of property you’re interested in. Office buildings, for example, tend to be more expensive but can also generate more income.
– Do your due diligence. This includes things like checking out the property in person, getting a home inspection, and speaking with the current owner.
– Negotiate a fair price for the property. This will help you make a profit when you resell it.
With these tips in mind, you’ll be on your way to successful investing in wholesale properties. Just remember to do your research and take the time to find a property that’s right for you. Good luck!
What you should consider before investing in strip malls?
Here are a few key tips that will guide your investment:
- The ideal location. A strip mall can only perform well if it is located in a densely populated residential area, highly visible and easily accessible by a significant part of the population. The location doesn’t have to be in the center of town; it can be in the suburbs as well.
- Offer generic spaces. There are no two tenants who offer the same space. Therefore, we recommend that you offer a generic space fitted only with the basic utilities/ amenities. The tenant can come in and make specialized changes to their space.
- Tenant Mix. The concept of tenant mix refers to the identification, selection, and allotment of spaces to tenants to help in maximizing traffic and possibly increase the sales to the tenants. Search for in-person service providers such as barbershops and dining establishments that will force the hand of clients to come down to your strip mall.
- Don’t be afraid of investing in an older strip mall. You might have to incur some costs in terms of upgrades and maintenance. However, if its location is ideal, you can install newer upgrades and compete with newer options in the market.
- Due-diligence. Some services might not fit in with the needs of the market or location. Make sure you know which businesses have failed in the past and why. These answers will help you select the best tenants for your long-term investment.
As we continue to weather through the pandemic, the economy is now looking up. Soon, it will be business as usual. Choosing to invest in commercial real estate is an almost full-proof investment, guaranteed to do well.
If you need more information and professional advice on the same, contact the property experts at Sapphire Capital Investment.