The three rules of real estate are location, location, and location. Even though this has become cliche, it is cliche because it is true. But, what does that really mean in the context of commercial real estate and what other factors are critical for successful investing? Here are several keys we at Eidi Properties focus on in order to cultivate the best conditions for success.
Location isn’t simply where the property is, but what immediately surrounds the property. For example, we prefer hard corner, particularly signalized, lots. Traffic signals provide better ingress and egress and are self-promoting. People waiting at traffic lights take in the scenery, which includes the corner commercial real estate. Getting those eyes positioned to see the signs of the stores is built-in advertising. Curb appeal is also key in drawing attention to the plaza. Eidi Properties takes particular care in ensuring that the Shopping Centers are well manicured, clean, inviting and safe for the customers.
We look for locations that are single-story buildings. Most of our tenants are retailers and easy access to their stores and their neighbors is essential. This is different than an office model where building up instead of out is a good use of space. For our purposes, access and ease make the location valuable.
Businesses that have strong anchor stores with a national presence can draw significant traffic. This also means these properties with large national and regional well-known tenants draw interest from other tenants who want to be near them. Smaller mom and pop stores provide great variety and local flavor.
Sometimes, commercial real estate has all of the qualities we want, but needs a little TLC. For example, we had locations without signalized access, otherwise it was a great location. We worked with local authorities and invested in creating a traffic signal that helped provide safer traffic conditions and upgraded our location’s ingress and egress. Many locations need upgrades to their parking lots, facades or other aesthetic elements. We often purchase distressed properties, upgrade their infrastructure and curb appeal, which increases the value to our tenants as well as to Eidi Properties.
Yes, the three rules of real estate are location, location, and location. But, as simple as those rules are, success comes from understanding the complexities of those simple rules.
Stay with us. In our next piece, we will talk about the importance of CAP rate and occupancy.