What You Need To Know About Retail Real Estate
If you’re thinking of entering the retail real estate industry, you need to stay informed about developments in this sector for months before you make your first investment. Here are the top trends that you need to know about.
Leases Are Changing
For potential investors who’ve worked in other areas of the real estate industry before, it’s important to note that leases are changing. Many landlords now charge percentage rent rather than a fixed price, meaning that tenants’ rent is based on how much profit they make. Also, landlords are much more willing to sign short-term leases for businesses such as Halloween prop and decoration stores. Both of these practices are friendly to small businesses, and you must be willing to adopt them if you want to be competitive.
Properties Are Used for Many Purposes
The days when a single tenant would purchase a property and use it for one business are over. Most rental agreements today involve mixed-use developments. For example, a developer leases a property to install grocery stores, gyms, and apartment buildings rather than a mall. As a result, mixed-use leases in the retail real estate industry tend to be larger than before.
New Types of Business Are in Style
After taking a break from real estate, you need to adjust to the new businesses that want to use your land. Some microwbrewery owners want to house their factories on your land, even though many states’ regulations used to forbid manufacturing complexes in housing areas. Additionally, depending on your state, people who run mairjuana dispensaries and related stores may apply for a lease. When you encounter these situations, read your state and county laws carefully, since they vary greatly from area to area.
Parking Is Tight
No one likes to drive in circles looking for parking before eating out or going shopping. Unfortunately, most retail areas have much less parking space than in the past, even though they have more customers. At the same time, you need to install room for ride-sharing services to meet their customers. To balance these goals, as you design the optimal parking lot for each development, work with your city to promote ride-sharing services and public transportation.
Before you dive into the world of retail real estate, learn about these trends. That way, you can address them in your business plan, making your investors more likely to give you your startup capital.