According to JLL, the US ranks first in e-commerce. The United States accounts for almost a fifth of the world’s consumers and sellers when it comes to retail.

There a lot of assumptions about how the retail business of real estate can go down because of e-commerce. However, a proven track record shows that retail real estate still delivers solid returns. Retail real estate investment produces about 10.8% on average returns every year. Commercial real estate just produces around 10.2% every year.

This article has an overview of how to understand retail leases, asset classes, e-commerce and its effects, and demand drivers in real estate.

The data provided by the International Council of Shopping Centers show different retail properties that sells consumer goods and services.

-Malls are enclosed spaces that contain different kinds of stores, restaurants, and a theater under a single roof. The Gross Leasable Area Range or the available space that can be rented by a mall is 400,000 to 1 million and more square feet. The value of per square foot is around $150 - $500.

-Lifestyle Centers – This combines the shopping centers of malls and commercial development that is targeted to high end consumers. It has restaurants that have high quality food and great dining experience. The value of per square foot is around $400 - $1000 or more. Lifestyle centers do not require much land unlike malls. The Gross Leasable Area Range is 50,000 – 400,000.

- Power Centers can include stores such as The Home Depot, Walmart, Sam’s Club, Kohl’s, fast food chains, eateries and cafes in one building. The Value ranges from $125 -$250 per square foot, and the Gross Leasable Area Range is 5,000 – 600,000.

Other assets include community centers, neighborhood centers, factory outlets, and convenient centers. You can found the information on the available prices and Gross Leasable Area Range on Crowdstreet.

Amazon and Retail Real Estate

While Amazon ranks first in terms of e-commerce, it now ventures into the retail real estate market. Amazon Go opened its brick and mortar store in Seattle. Jeff Bezos, the CEO of Amazon still believes that nothing beats in-store shopping as it can be a way for customers to discover new products

Demand Drivers is still consumer spending. The price of a piece of land depends on factors such as vehicle and pedestrian traffic. If an area has more consumers, the real estate will be expensive as well. There are strategies used by several tenants to increase their sales and to get their investment back. It is not uncommon for a pharmacy to be located in the left side of the street so that consumers can go in on their way home.  Strategic locations can include a Starbucks restaurant opposite of Walgreens.

When you are looking for a great retail deal, it is important to know how can an operator provide great customer experience. A lot of offerings are found in the CrowdStreet Marketplace. Register for free today.

True Cool AC are experts in utilizing the latest technology for your heating and cooling needs. For more information call or visit Retail Investment in Real Estate