Purchasing small community retail strip-good or bad?

Question

Hi, everybody. Happy Sunday.

One of my past client is also an investor in Class C small strip investor. There was a small strip center by his current one is on sale for 3 y and we are going after. The retail has been hit hard by the pandemic. Do you think it is the time to buy some discounted Class C small strip and start renovating them and build some small community must needs things? Thank you for your input.

Ronald Rohde · Answer

2 years seems like a good vacancy plan. Focus on the entire tenant mix since you can build from scratch, thats how the most successful redevelopment plans work! Let me know if you have any leasing questions, we do lots of retail work.

Kami Adibi · Answer

I apologize for my ignorance but whats 3y. (3 million?)

Strip malls in communities that have been hit hard can be good opportunities. I do however feel that the retail turnaround might take a while. People are not going to open stores right away si the price would have to be attractive or better yet a foreclosure

Kami Adiby

Fang Underhill · Answer

Thank you for the info. Yeah. This is our trial run. We decided to go in all cash and prepared two yrs vacancy holding cost.

Fang Underhill · Answer

We are buying $500k-600k.

Marc Rice · Answer

@Fang Underhill

I’ve heard certain stores do well in these small strips such as barbers, nail salons, etc. Could get it very discounted but you’ll want substantial holding costs to ride out vacancy

Ethan G. · Answer

What is the price you are looking at buying it at?