Choosing a niche or putting eggs in different baskets

2 Replies

Hello everyone, 

I moved to south florida from Europe about 7 months ago. I had some cash and invested in a shopping center with a cap rate 7.50 plus minus. I run the plaza myself and i really enjoy doing it. Like we all do, i would like to expand my portfolio. Reading hours of articles and forums i really cant decide or forecast should i invest in another strip mall that fits my budget with a good turnover or due to online shopping it would be too much risk to end up with several strip malls in 10 years. 

I ve talked to several brokers about multi family houses and in the area the cap rates looks very low due to high demand. Personally it scares me to buy an asset that i cant drive to check the property regularly so it holds me back to look sth out of state. 

1) What do you guys think investing in more strip malls ?

2) Should i not worry about investing a property in other state (eventually you set up a system somehow) ? 

Thank you in advance

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Depends on your level of sophistication with a niche. Retail is amazing right now but I do it everyday so fully understand the asset at an in depth level.

I like strip centers. If the location is right, access, traffic counts, sight lines, tenant mix,rents,etc. then they can be great long term investments.

The younger generation loves to shop at brick and mortar. There are certain apparel only and office product type places where it makes more sense to go online only. What everyone is talking about today with big box we knew 6 years ago in the industry what was happening.

Retail is not going away it is just evolving. Even Amazon one of the largest online selling platforms in the world is expanding to brick and mortar locations. One is not superior to the other it is just with technology evolving retailers are figuring out percentage to brick and mortar versus online presence. There are plenty of internet resistant tenants growing an expanding brick and mortar. Big box say 40k sq ft and up very little are expanding to new projects and if they are expanding take cheap 2nd or 3rd generation space at low rents.

       

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