Rensselaer, NY · Member since 2016 · 27 posts · 6 votes
Good afternoon everyone, I would like to get some opinions or advice as this is going to be my FIRST retail property ever that I would buy. Basically what I am wondering is what should I ask the sellers, what should I look for? There are four clients in the plaza right now, but the contracts end next year during different times. How could I get them to stay, how do I guarantee them to stay? The price is 1.7M with a NOI of 133k. Licenses, laws, rules, maintenance. Thank you in advance!!
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
9y
I spent a few years looking for the right commercial property. Was close on a few occasions, but wound up buying residential. There's a whole number of things you have to look at compared to residential.
1. What type of commercial strip is it. Is it purely local, such as convenience stores, laundromats, dry cleaners, or something wider, such as Supermarket, hardware store, paint store.
2. How are the businesses currently doing. For restaurant type outlets, I visit the strip at different types, to see how business is. There's one strip I was interested in, I watched the restaurant at different times, ate there dinner time. For laundromats, I visit nearby competitors, at different times of the day..
3. Did you drive by the area to see if there are vacant stores? Did you find out how long they been vacant and what type of rents they're asking for?
4. What I found helpful at one point was I was also looking to buy or setup a laundromat business somewhere, I had a business broker who is also a commercial realtor searching out locations for me and he gave me good advice on what's hot, what's not.
5. I visited city planning on a strip with a restaurant I was interested in. There I learned the town required the new strip owners to add more parking by paving over an empty lot, part of the property not paved. The owners claim to know nothing about it.
6. If you're at city planning, find out the area's master plan. Are there any new malls or plazas planned nearby?
These are the things I look for. My dad owns a small commercial property for 50 years, and unlike residential, a vacant store takes him 6 months to a year to find a new tenant.
BTW, my wife was a city planning major, worked as a city planner. Tells me even traffic patterns can spell the success or failure of commercial locations.