Residential housing and retail real estate are closely linked. The boom in housing produced a follow along boom in retail real estate. Now, the housing bust is producing a similar bust in retail real estate.
Suddenly, choosing the retail site where you locate your business is a much bigger deal. First, there is a glut of retail space in many markets. As a renter you are in a good position to drive a hard bargain. Second, regardless of the bargain you need to be sure that you don’t get caught in an empty mall. You rent in a mall to get the traffic pulled in by the collection of tenants. Third, check out the financial health of the landlord. Financing for retail space is always convoluted. Receivership can have many negative aspects for a retail location and the tenants.
There is opportunity and risk when renting retail space. Think it through carefully.
Let me know what you see out there?
Jim Norton
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