Multifamily vs Retail

[Kyle D.]

Whats a better investment multi famialy or retail. Most of the retail plazas  for sale near me have about the same noi as a 100 unit apartment complex and the retail plaza is a few million cheaper also. So what's better to me it seems like retail is better in my situation. Is retail more complicated than multi famialy?

[Joel Owens]

Hi Kyle,

On the asset class cycles Retail for multi-strips has some great value right now. Multifamily is about at it's peak so is really frothy to buy into.

I do both asset classes for my specialty but I am doing more with clients on retail currently.

Retail typical on strip centers is 2% annual increases in rent. Multifamily averages around 3%. Inflation is about 2 to 3 % a year so value of the dollar you are keeping pace on about a breakeven scale.

Most retail is base rent per sq ft with NNN cam tenant re-imbursement. Financing available depends on size of the strip center and loan size. I usually have to see clients financial statement for liquidity and net worth before I advise what makes sense for properties and structure.