Strip Malls Are Still Going Strong in the Retail Commercial Real Estate Space

There are some aspects of the economy that are faltering, and retail business seems to have bee hit hard over the past few years. Large companies like Toys R Us no longer exist because they could not stay afloat amid internet-based businesses like Amazon. Many of the popular stores, like Walmart and Target, are inflating their online footprint to provide customers with access to more inventory and keep business going strong. There is one area of retail that seems to be booming, and that is strip malls. Builders are still constructing strips made from a conglomerate of retail offerings in the hopes that consumers going to one will go to another. If you are looking for investment in real estate, the strip mall may be the way to go.

The Mixed Use Is Appealing

One reason strip malls are resilient is they offer a mix of services and goods. Things like restaurants and nail salons are internet-proof, meaning they cannot be moved to cyberspace as a retail business can. People, cooped up day after day, take to these strip malls to get something they can’t order with a click of their mouse. Specialty businesses and local favorites all have a place in a strip mall.

Costs Are Lower Than Larger Malls

Investing in a strip mall, whether it is already built or not, presents a higher return than larger malls. This is due to the longevity of tenants and the lower cost of permitting, overhead and details. If you invest in a strip made up of five total tenants, that gives you only maintenance for those five spaces. You aren’t responsible for maintaining vast areas inside and out. A smaller space also means fewer vacancies at once. You won’t run the risk of having half of your tenants leave and making the center less-desirable to customers. Chances are you will be able to fill any vacancies quickly.

Opportunities for New Tenants Abound

Lately, seasonal and pop-up shops have been making the rounds in shopping centers with vacancies. Halloween-themed shops, specialty book stores, and unique dining opportunities are three examples of short-term tenant possibilities. These lease terms are typically favorable to your bottom line. You charge higher rent because the duration of the contract is much shorter. It also fills a vacant spot for a time while you look for a permanent solution.

Retail business ebbs and flows like everything these days, but strip malls are a facet of commercial real estate that is going strong. Their smaller space, high tenant occupancy, and possible mixed uses make them a gem for any investor.

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