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Is Retail Property The Next Big Real Estate Niche?

by blogger1
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on Wednesday, 06 December 2017

A lot of noise is being made about the dramatic number of stores being closed this year. Could this actually be creating some of the best opportunity real estate investors have seen in the last decade?

Credit Suisse estimates that by the end of 2017 almost 9,000 retail stores will have been shuttered. That’s a new record, and almost 50% more than in 2008. Some are calling it the ‘retail apocalypse’. Even major mall operators like Simon are panicking, and are trying to sue brands like Starbucks to keep stores open to avoid their assets turning into zombies.

Wherever there is distress there is opportunity. When there is a need, there is a demand for help. The game has changed for retailers. The Amazon impact is now in full effect. That’s not a trend which is going to be reversed in the foreseeable future. Retail investors, property owners, asset managers, and the banks they owe loans too are all eagerly looking for solutions.

Experienced real estate investors should recognize this as a spectacular moment to step up. Neighbors, cities, and other area business owners don’t want these properties to wind up boarded up, and a blight on their own finances. Yet, real estate itself is in more demand than ever. Re-positioning may be a must, but it can be done. There could be a chance to negotiate great deals on these assets, and to convert them into something more needed and valuable.

In some cases that may be a new generation of shopping plazas designed to serve online shoppers and to provide community entertainment spaces. In others places it may be time to convert these dinosaurs into mixed use properties, apartment buildings, and condos. Individual investors don’t have to have all the cash and expertise to do it all themselves either. Loan notes and the bricks and land can be bought and flipped just like residential real estate. Or partners with more experience can be brought in.

What do you think about the state of retail today? What’s the future of these properties? Who do you know that could benefit from selling, buying, and investing in retail properties?

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