Thoughts On These Demographics?

[John Thedford]

Thoughts on these demographics? Retail strip about 9K SF. 100 leased. All mom/pop type businesses. Strip built mid 80's. Most tenants on 3 year leases. 

@Joel Owens??

POPULATION 1 MILE 5 MILES 10 MILES TOTAL POPULATION 1,857 45,944 194,648 MEDIAN AGE 45.3 41.1 45.6 MEDIAN AGE (MALE) 44.0 40.0 44.8 MEDIAN AGE (FEMALE) 46.6 42.0 46.4

HOUSEHOLDS & INCOME 1 MILE 5 MILES 10 MILES TOTAL HOUSEHOLDS 775 17,852 79,799 # OF PERSONS PER HH 2.4 2.6 2.4 AVERAGE HH INCOME $50,353 $57,011 $56,327 AVERAGE HOUSE VALUE $174,711 $257,379 $232,066

[Ronald Rohde]

What's the nearby competition? Is there a wal-mart in town?

If the T12 support it, pay a high cap rate...

[Joel Owens]

If it's mom and pop I put higher vacancy factor into my underwriting whether 100% occupied or not. Mom and pop have  a higher failure rate average than national chains and super regional tenants.

Built in the 80's is a very old strip center. I would have to know how many roof layers are in place and core sampling report for substructure. If too many layers insurance might not even insure the building.  

Population 1 mile radius is low.

Send me OM.

Thanks

[Damon DiPlacido]

Is the strip center in SWFL, where you are located? If so, then official demographics may not tell the full story as the seasonal population swells during 'snowbird season.'  What's the traffic count on the street?

[John Thedford]

@Joel Owens

Yes I felt the 1 mile demo is a bit weak. There are 12 units I believe. I just forwarded you the OM. Seller may carry some paper for me and that would be a benefit.

[John Thedford]

Originally posted by @Damon DiPlacido:

Is the strip center in SWFL, where you are located? If so, then official demographics may not tell the full story as the seasonal population swells during 'snowbird season.'  What's the traffic count on the street?

 It is a few hours north of me..but still close enough that I would probably self manage. I might try to get some higher quality tenants in with some concessions which may help raise the value some ( I am not 100% sure of that--so please give me your thoughts). The center is under 1M. I would probably put down 400-500K and ask seller to carry balance for 5-7 years. 

[Damon DiPlacido]

I oversee a ~1.4 million SF shopping center / retail portfolio and from my experience here are some things I see that may help increase your odds of landing a higher quality tenant beyond the basic demographics (income, population density, etc):

1.  Physical location: Position of the center on the street. Is center mid-block or at a hard-corner of signalized intersection? Is the strip center parallel or perpendicular to the road? If perpendicular do the storefronts face towards oncoming traffic or away? These last 2 questions defy logic in my mind, but some developers have built strip centers this way. 

2. Co-tenants: Who else is there? Chain store retailers are like sheep, and they do follow one another as many retailers have good synergies with one another.  As you have all mom & pop tenants you may need to sacrifice a little more on the first deal to open up the door for other potential deals. 

3.  Physical condition: Beyond repairing any obvious visible physical defects, a fresh coat of paint, new striping in the parking field, and some basic landscaping improvements. Even if the center is all concrete, adding some planter boxes with flowers on the side walk will go a long way towards curb appeal. 

4. ICSC: Join the ICSC, attend the ICSC trade shows and deal making events, make marketing materials geared towards retailers and retail tenant rep brokers. If you don't have the time for this, then hire a broker that does this.

4. Be a "Deal Maker": Know the terms of a retail / shopping center LOI inside and out, know what higher quality tenants look for, and know what you need to hold firm on and can bend on.

5. Be broker friendly: Most chain stores have strong relationships with tenant rep brokers. Have an understanding of CRE commissions and how to structure them appropriately.