Getting Your Retail Real Estate in Shape
Retail has been a battered sector of late. It was bad enough that the internet migrated lots of shoppers out of malls and into cyberspace, but then we had to go and have a financial crisis. When it rains it pours.
Of course, with every crisis comes an opportunity. And as we’ve been saying for months, when the going gets tough, the tough get creative.
The Wall Street Journal recently published an article about how health clubs have become the beneficiary of and the a savior to a tough retail real estate market. The lesson is that when the market changes, you have to think outside the box.
If you’re facing challenges with any of your properties, then get around the most creative people you know and brainstorm about solutions. It may seem obvious, but sometimes we get stuck on a problem and just try thinking harder. Sometimes it’s more important to think differently.
Albert Einstein (we heard he was a pretty smart fellow) said:
“You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.”
How true!
And if you need a little inspiration, go to iTunes and check out our podcast Creative Solutions to Today’s Property Problems. Then use our Feedback page to tell us about your problem and creative solution. Who knows? Maybe you’ll end up as an inspiration for another investor somewhere down the road!
6/27/10: Cashing In on the Changing Retail Market
Retail real estate across the country has been mauled by the recent bear market. Many large retail centers are vacant and dilapidated, while many more are under performing. What’s next for retail? More importantly, what’s the opportunity? To find out, The Real Estate Guys™ call on a big deal hunter who has over 30 years and billions of dollars of experience!
On safari in the studio for this broadcast:
- Driving the jeep in his khaki’s and bush jacket, host Robert Helms
- Pushing the jeep in his leopard skin loin cloth, co-host Russell Gray
- Riding shotgun and snacking on frikkadels, the Godfather of Real Estate, Bob Helms
- Big deal hunter, special guest Tom Morris
When you enter the jungle of real estate investing to hunt for opportunity, you never know what challenges will cross your path. Many obstacles and dangers can be avoided. Others must be met head on. Of course, when you’re hunting, your objective is to locate the prey and subdue it. In other words, there’s risk involved.
Shooting fish in a barrel or hunting rabbits is one level of risk…and one level of reward. Going after the big opportunities often entails a higher level of risk and requires a higher level of skill and experience. That’s why most investors are well-advised to start small. It’s also a really good idea to be mentored by more experienced hunters before taking on the big game.
So you can imagine how excited we were when we first met Tom Morris. He’s been hunting big time real estate opportunity for over 30 years and after billions of dollars of deals, he’s telling us that now is one of the greatest times ever to be a real estate investor. Really? Okay, we’re listening!
Although he’s very experienced in all types of real estate, Tom’s love is retail. We’re talking BIG TIME retail – as in shopping malls and retail centers with hundreds of thousands of square feet (on the small side)! Tom’s been involved in mall projects with millions of square feet and hundreds of retail tenants in a single project. Wow! THAT’S big game. Of course, if a big deal turns on you it can devour you very quickly, so you better know what you’re doing! Fortunately, Tom tells us there are many things you can do to mitigate risk.
We start quizzing Tom about the state of retail in the wake of the Great Recession. What are the problems? What are the causes? Where are the opportunities? We were SHOCKED to hear how BIG the discounts are on distressed retail assets. It’s AMAZING how, with relatively little money, you can acquire assets with HUGE UPSIDE potential. (Sorry for all the caps. We’re just EXCITED!).
BUT…(and it’s a big but), you better have a plan. And you better have connections. And you better be able to think outside the big box. If you do, then there’s BIG money to be made!
Tom shares with us some of the creative strategies he’s currently employing to acquire and re-hab distressed retail properties. Even if you don’t have plans to be a mall mogul, the principles Tom employs are applicable to other types of real estate. Besides, any time someone with 30 years and billions of dollars of experience wants to share their wisdom, we think it’s a really smart idea to listen. Our attentiveness is rewarded when Tom reveals the single most important component of his success and the #1 investment of his career.
Not everyone is able to chit chat with a big time investor. Tom doesn’t do seminars, write books or sell boot camps. He’s just out in the real world doing the real thing. That’s why you have The Real Estate Guys™! Our mission is to hunt down big brains, powerful ideas and great resources that help you succeed. Your job is to listen, learn and take action. Plus, we really appreciate it when you tell all your friends about The Real Estate Guys™. Enjoy!
Listen Now
Don’t miss a show! Subscribe to the Free Podcast
Want More? Sign Up for The Real Estate Guys™ Free Newsletter!
2/21/10: Commercial Property Update – Woes, Recovery & Opportunity
Many people think that the residential real estate crisis and its impact on banks and the secondary mortgage market have set the table for an even bigger implosion in commercial real estate. But if you believe that opportunities often come dressed as problems wearing work clothes, maybe that isn’t so bad.
In studio today to take a look at the State of Union in commercial real estate are:
- Your President and host, Robert Helms
- Co-host and teleprompter operator, Russell Gray
- Our Speaker of the House, the Godfather of Real Estate, Bob Helms
With so much focus on the residential real estate and mortgage markets, which is of much greater interest to the main street consumer and news outlets which cater to them, we thought it would be interesting to take a look at the commercial side of real estate. Many observers think that there are dark days head for commercial properties, but what are the current trends? More importantly, where are the best opportunities today and in the future?
We start out by taking a look at the sales and pricing trends in retail real estate. What affect is the soft economy and subdued consumer spending having on retail occupancies, rents and cap rates? Will money be available to purchase and refinance these properties? Will there be buyers? Inquiring minds want to know!
Sticking with the discussion of concerns about the availability of funding, we delve into a discussion of what’s happening in multi-family where government subsidized money has been plentiful. With the pressure on Fannie Mae, will multi-family residential funding remain available? What if it dries up?
Another side effect of a soft economy is financially weak or insolvent tenants. Are commercial tenants starting to walk away from leases like homeowners are walking on upside down mortgages? And how likely are they to accept rent increases? It seems to be a tenant’s market right now.
Now there are lots of facets to commercial real estate and we can’t possibly cover them all in one show, so we decided to wrap up with some talk about office – and what’s happening to vacancy and rental rates in today’s “jobless” recovery. If that isn’t an oxymoron, it should be. It’s like saying “reliable copier”.
Of course, we can’t talk about all the challenges without remembering that problems often bring with opportunity – for those willing to think independently and outside the box. As always, there are no magic formulas or one-size-fits-all solutions. Challenging markets require courage, creativity and the kind of capital that comes as much from time, talent and relationships as it does from credit lines and cash deposits. The good news is that when the going gets tough, most of the competition goes off and follows the herd to “greener” pastures. If you believe the real estate “grass” will grow again, then it might be a good time to stake out some new territory.
Don’t miss a show! Subscribe to the Free Podcast
Want More? Sign Up for The Real Estate Guys Free Newsletter!
