As we have noted in a number of our posts, the key to success in real estate is to buy low and sell high. Whether you are considering distressed residential real estate or commercial properties that need work, if you can see a diamond in the rough, you are likely to maintain success in the marketplace.
These proverbial diamonds apparently can still be found in commercial retail properties. Market analysts suggest that now is the right time to purchase such properties because the fundamentals surrounding such properties are still strong.
For instance, interest rates for commercial real estate purchases are still at historic lows and there are no current market indicators suggesting that a spike in rates is imminent. Nevertheless, the opportunity to lock in low interest rates for long term investments cannot be ignored. Additionally, sellers of shopping center assets have likely maximize the value and equity in their properties and are likely to consider most reasonable offers.
The rash of failures and bankruptcies affecting big box retailers cannot be ignored. After all, spaces vacated by closings from J.C. Penney’s, Sears and Toys R Us may make some investors skeptical about large retail spaces. However, the market fundamentals regarding shopping habits still remain strong despite the increased market share of online retailers. This suggests that alternative uses for former retail spaces may make them worthy investments.
After all, as more malls and shopping centers continue to focus on drawing experience based retailers to their locations (i.e. unique dining and entertainment experiences), it is not uncommon for retail spaces to be converted to suit the needs of new tenants.
If you have questions about the legal aspects of real estate investment, an experienced attorney can advise you.