Investing in commercial real estate has the potential to be a rewarding and satisfying venture. Many in Illinois and beyond purchase commercial property as a second source of income, a retirement plan or even as the sole means of financial support. With the proper management, you can do well in this industry.
Unfortunately, everything changes, and even the face of retail is undergoing a vast transformation. If you own storefront property or other retail or office space, you may be concerned about the recent trends. More brick and mortar stores are closing, and shoppers are preferring to do their business online. You may wonder how you can keep your property lucrative in such a market.
Remaining relevant in a digital world
It is true that commercial real estate is facing some challenges. Fewer people leave their homes to shop. In fact, one study shows that 96 percent of those polled do their shopping online, making retail space obsolete. Additionally, in this digital age, more employers can allow their staffs to work from home, so they no longer need large office spaces. How can you continue to make money on your commercial properties in the face of these obstacles?
For one thing, you may have to come to terms with the fact that you will not entice large retailers to rent from you, so you may have to cater to a smaller market. Some examples of ways you can make the most of your commercial real estate business include the following:
- Purchase properties, such as strip malls, that have more than one purpose to avoid having all spaces empty at once.
- Be willing to renovate your space to new purposes, such as pop-up shops, co-working spaces or storage.
- Entice tenants who will provide maximum convenience for customers of existing businesses nearby.
- Make your property into an experience that shoppers would be willing to leave their homes to visit.
- Study and follow the trends so you can focus on attracting tenants who don’t compete with online retailers, such as hair salons, restaurants, medical offices and spas.
- Consider changing to multi-family housing or industrial properties, or investing in these along with your retail space to diversify.
These considerations may seem cumbersome when combined with the details you must already keep in mind, such as zoning, environmental issues and the legal matters involved in the purchase and sale of commercial space. However, you can seek guidance from a legal professional who knows the laws and can provide sound advice for your commercial real estate plans.
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