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In Commercial Real Estate It Is The Same Thing

Store Closing Out In seeing pockets of vacancies around my area in strip shopping centers due to a tough economy I tracked down a few owners that were still in business yet had moved. I discovered

In Commercial Real Estate It Is The Same Thing.

Agents specializing in Residential, Lakefront, Farm and Ranch, or Luxury, all know about it.

Location, Location, Location.

Turns out this niche batteries store HAD to move to survive. To get better foot traffic for his business.

Another story involved the anchor grocery store moving out of a shopping center and the private Christian bookstore folding up. Where did all the former customers go? Apparently wherever the anchor store moved to.

The retailers Walgreens and Kohls have specific targeted areas whether they be free standing corner locations on busy highways or medium upscale shopping centers. Whatever they are doing, it is working. And then we have McDonald's who is not really in the hamburger business at all but the real estate business. Those guys know how to pick the winning spots for the most part.

Point is, as a commercial business, do your due diligence up front on location. Whether product or service oriented or restaurant, a good location is critical. Or just plop your business down wherever you see a McDonald's to avoid those clearance to the walls sales to close your doors and be no more.

Posted by Gary Woltal - Associate Broker REALTOR® Dallas Ft. Worth on 11/01/2009 12:40 PM

Comments (21)

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21 Comments on In Commercial Real Estate It Is The Same Thing

NOV

Great post. To own commercial is to know they will come and rent from you. For first time commercial owners an axiom to remember.

A local neighborhood watering hole closed last night. If the owners had asked the residents of the area what the issue was and how to retool to make it work we could have told them. Instead they backed their bags and moved on. To bad as they had a prime location and a captive audience and they blew it!

Gary, you raise some great points that are especially true in some neighborhoods around here. If the location is near a Metro stop and has reasonable parking, it's a winner.

Gary, what an important point that so many fail to understand.

Hi Gary,

You make excellent sense. It is all the same..location..location..location! Knowing who your market is and finding the best location to service them is key!

I have seen a handful of small businesses here that have moved around some to get into a better location. I have also seen commercial agents start to creep into residential sales as well.

Visability is so important in this market and I have seen some businesses that have also made that move. Great post Gary!

Hi Gary:

In any part of real estate...it's Location-Location!

Great rule of thumb for Commercial Real Estate is to be next to a McDonald's...

It's so true....

Gary--Great point as I see so many businesses with great potential close up due to poor location. Thought needs to be put into every part of a business start up plan and location, location, location is just as true a mantra for businesses as it is for homeowners!

I have noticed that some highly vacant strip malls are doing face lifts. It seems to me that they are trying to make a poor location look as if it is a prime stop spot. One constant in Real Estate is that it is local. But, business owners need to realize that the prime locations can change. Urban sprawls have slowed.

Gary you are so right and we are going to see a lot more fall out in the commercial sector in the coming months. I spent almost 6 years helping my family's commercial real estate company in West Texas while keeping up my business in Austin and LOCATION rules both!

Gary,

Looks like residential suffered first, whole commercial was OK. And then, they never had that problem with subprime in commercial. That was a plus. They are suffering now not because of the screwed lending, it is just the economy got to them at full force. They will take time to recover, especially retail and office component. Multi-family might be the first one to start recovering... but it is not today

Location is so improtant. A good location can turn bad in a short time when new circumstance happen. We need to recognize that much sooner than we now do.

Hi Gary, A excellent post. I recently took the bulk of my CE the entire course was based on community and the core industry (s) including retail and traffic studies of how locations are studies are done and the criteria for why a larger retailer will select one location over another. When I got the subjects I was figuring "what do I need to know this for".When I got into it, it was totally fascinating. I was shocked at how much I actually learned about the subject and it's relevance to my real estate career. I had intended to write a pos about but never got around to it. The information is sort of techncal and I am not sure others would enjoy reading it out context to the whole course.

Gary: I have seen McDonalds that have closed. Also different types of businesses may be better suited for some locations that others and all may not neccessarily follow the under $8 fast food franchise metric.

NOV

I think every city has a location that many businesses have tried to set up shop and due to the bad location, they all go out of business, one after the other. I've never seen a McDonald's relocate ha!

Gary: Interesting post. I have never seen a McDonald's close nor relocate, at least in my area. Seems they do their due diligence and get the prime location to begin with, so no need to move.

I think buyers sometimes forget about the location when they're home shopping. They see a cute house, fall in love with it, and the price is so low they can't say no. But sometimes that price is low for a reason. Because it sits across from a school, backs to gas station or is located on a busy street. Then they wonder why they can't get top dollar when they turn to sell it. It doesn't matter what kind of real estate you're talking about, whether it's commercial or residential, it's all about location.

Hi Gary... I heard a story on the radio a few weeks ago that basically said that real estate is as much a part of Starbucks' strategy as is their coffee.

NOV

Gary - It is always important to assess location whether selecting a location for your business or new home. Luckily, compared to your stories, we are seeing new businesses in our neighborhood. Other than Walgreens, all of the new stores are small businesses. I hate to see the subsidies given to corporate chains - especially when I see the companies that succeed and stay are usually small, family owned businesses.

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