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Retail Investment Properties – How Do They Vary?

retail investment properties

Retail investment properties consist of various sectors. Shopping centers with its own sub groups like strip centers, power centers, malls, urban life centers, triple net single tenant properties and outlet stores.

The main difference of course is scope and size of these asset groups. Malls being the largest and single tenant triple net property the smallest. The prices for such investment properties range from hundreds of millions to a few hundred thousand.

Some specialize with discount sales to highly expensive product lines. Sizes can range from three thousand sq. Ft, to millions with malls. Loans can be arranged with 20 percent down to 40 percent of the overall total value.

Names from Neiman Marcus to a simple auto parts store like AutoZone.

Retail Investment Properties May Include:

  • fast food,
  • clothing,
  • auto,
  • toys,
  • electronics,
  • appliances,
  • technology

….and a host of other too numerous products to describe.

Very important traits they all need to possess are visibility, high traffic counts and demographics that support the dollars being able to be spent to purchase the various product lines offered by these retailers.

One, three and five mile population counts and various make up of the people living around the site of the retailer is essential of who will lease in such locations.

Traffic counts of over 15000 cars a day or higher is considered good while population of 15000 , 45000 and 100,000 might be considered essential for these various one, three and five mile stats. Average income per family should be in excess of $45,000 or higher to appeal to most retailers.

Cap rates can range from 4 caps to 7 caps today for a sale to occur based on net income of these retail investment properties. Loans are not difficult to get today at relatively low interest rates between 4 and 4.5 percent. Thus cash flows expected between 5 and 7 percent is typical on your equity.

 

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Tags: cap rates, cash flow, investment properties, triple net properties, triple net property

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