Shopping centers can be a great opportunity for commercial real estate investors. They offer variety in tenants, consistent income, and great potential for growth in the future. A shopping center can look very different, depending on the town or city, as well as the types of tenants the center tends to attract. Some may have a lot of chain stores, while others might have mostly local businesses. There may be a mix of retail, grocery stores, clothing stores, and furniture stores. Oftentimes, there can be many moving parts with shopping center investments, as there are usually multiple retail tenants to manage at any given time.
Find out here what you should look for when investing in a shopping center for sale, the best search criteria, and how you can identify the perfect investment opportunity for you with the help of the right broker.
What to Look For
You want to find shopping centers for sale located in a high traffic area. This will ensure that it always gets good business and there will always be tenants who want to occupy one of the spaces in the center. When the available shopping center for sale is located in a good area, potential tenants know there will be people coming by consistently.
So what makes a good commercial location with high traffic? This varies by county or city. Generally speaking, this is an area on major roads or near public transportation and the property should have ample parking. It might be in a downtown or area of business or retail/commerce, or it may be in an up-and-coming area with a lot of new residential builds.
A diverse range of tenants is a good idea for potential shopping center investments. While this may depend on the shopping center, it could include boutiques, local shops, various retail and national chains. There should be a range of product (or service) offerings so that customers can have all of their needs met in one location, and plan to come back in the future as well.
When you are looking at a commercial shopping center, identify the current tenants who will be there awhile longer and those that have a lease ending soon. Learn about the histories, rent payment, and credit files of any shopping centers for sale early in the prospecting process.
One thing to consider is the property age. This could come into play in many different ways. For one, depending on where it’s located, newer commercial builds might be available that will be more attractive to tenants or their customers. Another factor is the maintenance and repair costs that come along with older shopping centers. HVAC, plumbing or construction issues, or general upgrades to these systems or the overall appearance of the building can add up quickly. Some investors might prefer an older shopping center lease property though, so don’t let age be the main deciding factor in your research process.
If there are many strip malls or shopping centers in the immediate area, it might make it harder to attract tenants. When there are too many shopping centers in one area, you will be competing with each other to draw in or keep tenants and make the most of your investment. As you search for the right shopping center for sale opportunity, be sure to consider neighboring properties as well as the local area. A high end shopping center might not do well in a lower income area, so watch for some of the warning signs that a shopping center is in the wrong part of town or just the wrong fit for you.
Expert Investment Support of Shopping Centers For Sale
For real estate investors looking for steady, long-term income over many years, a shopping center or retail strip mall can offer just the opportunity they are looking for. Many shopping centers bring a diverse tenant pool, which can provide stable income. Shopping centers also can be located close to it’s patrons, which has become increasingly important as people no longer stray as far from home for errands after the lockdowns and stay-at-home orders of 2020.
When searching for the right commercial property opportunity in shopping centers for sale, consider the location (Close to neighborhoods? In a well-trafficked area?) and the current tenants (Businesses that are likely to stay open and pay their rent on time?) What are the terms of the lease? Other factors to consider are the competition and the local area, so you aren’t fighting to attract new tenants in the future. You also should consider the age of the property, and how much time, energy, and money you want to invest into upgrades or repairs of the strip center or mall.
But don’t worry—a commercial real estate broker can guide you through the entire process and all the factors you need to consider with shopping centers or strip malls. At Sands Investment Group, our advisors are ready to help you identify the right investment opportunity for your real estate portfolio. A shopping center property can be a great asset to you, and our net lease brokers want to help you do it right with the most current listings available. Get in touch with an expert broker by calling 844.4.SIG.NNN or email us to learn about shopping center investment opportunities.