In the world of commercial real estate (CRE), performance is often generalized, making the market seem like a single entity. However, within this asset class, there is significant volatility across different property types. While office buildings and self-storage facilities have recently raised concerns, strip malls are emerging as a notable opportunity for savvy investors.
According to a recent article in the Wall Street Journal, strip malls are becoming the "hottest real-estate play" for investors. A key trend highlighted by data from Green Street shows that leased occupancy at strip malls reached 95.3% in early 2023, the highest it has been in eight years. Physical occupancy, meanwhile, stood at 92.4%, reflecting a growing gap between landlords signing leases and tenants physically moving in. This demonstrates how quickly the retail space is being leased, signaling high demand for these properties.
Additionally, large spaces of 10,000 sq ft or more, once difficult to lease, are now being snapped up by national credit retailers. The trend of leasing large spaces without extensive renovations has become more common, indicating growing interest in these properties.
One of the main drivers behind the success of strip malls is the ongoing shift to remote and hybrid work models. As people move away from city centers to suburban areas, the demand for local retail centers has surged. This shift has led to increased foot traffic at suburban shopping centers. The pandemic-related migration, with millions leaving major cities for the suburbs, has reshaped consumer habits, benefiting strip malls in those areas.
Further, despite the boom in online shopping, demand for brick-and-mortar retail locations has not been diminished as once feared. Physical stores are now essential for fulfilling online orders, particularly with the growing trend of "click-and-collect" sales. These retail centers offer a convenient way for consumers to pick up or return items purchased online, fueling demand for space in suburban strip malls.
In another significant shift, large retailers like Abercrombie & Fitch, Macy's, and Foot Locker are moving away from traditional mall spaces to off-mall locations, such as strip centers. These companies recognize the advantages of lower occupancy costs and stronger revenue potential offered by strip malls. This trend marks a move away from conventional malls in favor of more flexible, suburban retail environments.
Given the growing demand for strip mall spaces, more investors are looking to capitalize on this opportunity. Co-investing alongside experienced CRE operators can provide individual investors with access to these opportunities, even if they lack the resources to source such deals independently. Rore Invest, a key player in the market, focuses on acquiring grocery-anchored retail centers and strategically located properties across various regions.
Rore Invest’s investment strategy is designed to adapt to changing market conditions and identify risk-adjusted opportunities. The firm believes in the long-term viability of strip malls, even amid e-commerce challenges, and has already seen strong returns by capitalizing on market shifts. By focusing on high-demand areas and acquiring prime assets, Rore Invest is positioning itself to make the most of the current retail landscape.
For those interested in exploring the strip mall market, Rore Invest offers the opportunity to invest in high-quality retail properties across the U.S. Through their team of seasoned CRE experts, investors can benefit from a smooth, fully passive investment process and attractive returns.
To learn more about how to get involved, potential investors can reach out to Rore Invest’s Investor Relations team by emailing at info@roreinvest.com or calling directly at (904)770-5888. Alternatively, they can schedule a consultation to explore investment opportunities further.
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