A dynamic twist in trends, reportedly has retailers looking to invest in their real estate again. So as the spotlight is turned back on brick and mortar shopping where are the opportunities for commercial real estate investors, and what strategies are critical to remember during renovations?
A booming Massachusetts rental market has been both swelling the pockets of multifamily apartment building owners in the Northeast, and discouraging some commercial real estate investors from jumping in. Almost everything has been moving in favor of multifamily property owners recently. According to the Boston Globe vacancy rates have dipped to around 4%, while rents have skyrocketed by over 20% in some areas. Even mortgage interest rates have been sliding down again. This is providing incredible cash flow levels for landlords. However, asking prices of income investment properties are certainly rising too, which can be a concern for the adamant bargain hunter looking for a steal.
For those looking for a new real estate sector to tackle which promises significant growth ahead, it might be worth taking another look at what Massachusetts retail property has to offer, including local shopping plazas and mixed-use buildings.
Until recently many were concerned that rapidly developing technology could negatively impact brick and mortar retail. However, that now does not appear to be the case, with the lines literally blurring between virtual and reality, and several signals that suggest the retail sector has come full circle, and back to the neighborhood, and local high street.
Since last year there have been rumblings in the retail industry as some major technology platforms and companies began investing as much as 100% of new funding in brick and mortar real estate and offline sales mediums.
2014 Internet Week in NYC held last month revealed several more up and coming retail brands, including what would be considered tech startups launched by young entrepreneurs which are that are not just downplaying online shopping, but are actually morphing themselves into brick and mortar retail stores.
Both big and small businesses alike have also realized that real estate is far more important to their long term success and profitability than it has been before.
However, many existing retail properties require some serious rehab, especially in order to attract the best tenants and reach their full performance potential. Whether it is gutting an anchor tenant space, or simply upgrading fascia, signage and curb appeal, the amount of strategy put into project planning and timelines can make a huge difference.
Especially when there are existing tenants, keeping public perception and passing traffic in mind is critical to maximizing performance. What’s going in the space? How great is it going to be? Why should we look for a place to live closer to this shopping plaza, or try to negotiate a lease there now? These are all questions that should be dealt with and answered.
Exterior repairs and retail property repositioning can be an incredible opportunity, with plenty of PR ops. Or it can be a letdown. The same goes for office buildings and multifamily too. Talk to an experienced property management firm and leverage their expertise to maximize your investment property potential.