Retail real estate, while not immune to market shifts and technology-driven evolution, remains a smart choice for commercial real estate investors looking for potentially higher returns from passive-investment income.
Within the retail sector, net-leased properties and strip centers, in particular, continue to deliver safe and respectable yields. While tenant diversification helps ensure that investors continue to collect rent even after a tenant leaves, the return on investment may not be a true one when property owners pay out of pocket for tenant improvements. This makes net-leased retail a more constant and clear return as the tenants cover all expenses related to the property.
To-date, grocery stores and restaurants have not been as impacted by technology to the extent of other retail sectors, making them a continuously reliable anchor tenant for strip malls and other retail spaces. Yet, astute real estate investors recognize and are preparing for the impact that technology will have on disrupting the grocery market in the near future. Conversely, investments in industrial, medical and general office commercial real estate are generally more management intensive and, therefore, may not be suitable for every passive investor.
For these reasons, it’s important that investors seek counsel from advisors who understand the market and can align it with each investor’s unique goals and capabilities.
The team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email firstname.lastname@example.org.