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Retail Buildings, A General Overview

 

There are a great deal of retail buildings in the market place. The most basic is the strip center, or the neighborhood center. The center consists of a group of contiguous stores located in one or a series of buildings situated on a strip of land.

NO MATTER WHICH RETAIL INVESTMENT YOU CONSIDER, DO NOT FORGET THE FIRST RULE OF REAL ESTATE, LOCATION, LOCATION, LOCATION.

Market and Location

The property should have good visual exposure from adjacent streets and/or major roads, freeways/highways. In other words you should have no problem finding the retail location that you are seeking as a consumer.

The property should also be in an area that is heavily populated by both vehicular and pedestrian traffic. Automotive Traffic is measured by Average Daily Trips or ADT's.

The rental income from the center, no matter what type of tenant comes from base rent and percentage rent. In exchange for a lower base rent some tenants opt to pay the landlord a contingent rent called the "percentage rent"

Property Condition and Characteristics

Should have configuration for truck ingress, egress, accessibility and minimizing traffic flow congestion.

Store frontage, depth and overall size should be appropriate for the market.

Second story retail is commonly discounted unless long-term, strong tenancy and quantifiable market information is used to support.

Minimum parking ratio of 4.0 spaces per 1,000 Net Rental Area. Higher parking ratios may be required for tenants with higher parking demands such as restaurants, theaters and grocery.

For further discussion of retail buildings loans and their respective underwriting requirements please follow the above link.

   
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Lightning Commercial Funding - Small Business Loans, SBA Loans San Diego
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