What are Retail Properties and What Benefits Do They Provide to Investors?

Posted on September 28, 2019

Retail properties include a broad range of large and small malls, power centers with big box anchor tenants, strip shopping centers, individual stores and pop-up shops that market and sell a broad range of goods and services to consumers. Retail tenants can include clothing and accessory stores, grocery chains, pharmacies, convenience stores, gas stations, restaurants and even banks, emergency medical care providers and locations where consumers can pick up or return online purchases. In the current environment, a retailer’s flexibility and adaption to change are keys to their success. However, for investors, retail properties continue to deliver the same three benefits they have for many years, including the following:

• Steady income stream with high yields. Retail properties provide investors with a reliable income steam, in the form of monthly tenant lease payments, rather than capital gain growth, which relies on the property increasing in value over time.
• Long leases. Lease terms of 10 years with annual rent increases are common in the retail space, providing investors with the security that they will continue to receive monthly rental payments and not be faced with frequent vacancies.
• Low maintenance. Retail leases are commonly net leases that require tenants, rather than landlords, to cover the costs of property repairs, maintenance, utilities, insurance and taxes.

With offices in Miami, Orlando, New York City and Geneva, 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 info@orionmiami.com.