In the highly reactive, mathematically sluggish arena of traditional retail investment, the amateur syndicator views a 100-year-old brick-and-mortar building as a catastrophic liability. They look at the unreinforced masonry, the aging cast-iron plumbing, and the strict municipal preservation codes, and they immediately sprint in the opposite direction. They retreat to the perceived safety of a…
In the highly reactive, aesthetically driven arena of commercial real estate, the amateur investor views an aging, half-vacant retail strip center as a terminal liability. They look at the dark big-box store, run a localized demographic report, and attempt to mathematically justify a desperate retail leasing campaign. They assume that because the dirt is zoned…
In the highly reactive, yield-starved arena of commercial retail syndication, the amateur investor views securing a massive, high-performing corporate tenant as the ultimate finish line. They execute a 10-year lease with a hyper-successful coffee franchise or a boutique fitness studio, watch the gross sales explode in the first year, and assume their Net Operating Income…
In the highly romanticized, aesthetically driven arena of commercial retail, amateur investors suffer from a catastrophic delusion regarding property management. They acquire a highly trafficked, fully stabilized shopping center, successfully execute Triple-Net (NNN) leases with every tenant, and assume their financial exposure to operational friction is completely eliminated. They believe that because the lease states…
In the highly romanticized, mathematically sluggish arena of traditional retail investment, the amateur syndicator evaluates a sprawling neighborhood shopping center and only sees the existing buildings. They analyze the grocery anchor, they underwrite the in-line tenant rent roll, and they completely ignore the three acres of flat, sun-baked asphalt fronting the main arterial road. They…
In the highly reactive, headline-driven arena of commercial real estate, the amateur investor believes that traditional retail is dead. They look at a sprawling, 100,000-square-foot neighborhood center, see a vacant big-box department store, read a headline about the “Retail Apocalypse,” and instantly redline the entire asset class. They assume e-commerce has permanently mathematically destroyed the…
In the highly reactive, yield-starved arena of commercial retail syndication, the amateur investor values a shopping center based entirely on the fixed base rent. They acquire a 20,000-square-foot retail strip, secure their tenants on standard 5-year leases with flat 3% annual escalations, and pat themselves on the back for “stabilizing” the asset. They believe that…
In the highly reactive, emotionally driven arena of retail syndication, the amateur commercial investor views a shopping center as a collection of independent businesses. They look at a 50,000-square-foot neighborhood strip center, observe that the 20 smaller “in-line” suites (the nail salons, dry cleaners, and boutique fitness studios) are 100% occupied, and confidently execute the…
In the highly romanticized, constantly shifting arena of retail real estate, the amateur investor suffers from a fundamental misunderstanding of consumer mechanics. They walk into a sprawling, beautifully landscaped outdoor mall, admire the massive square footage of an anchor tenant or a sit-down restaurant, and assume that physical size mathematically correlates to commercial value. This…
In the highly romanticized, yield-starved arena of commercial real estate investing, the “Absolute NNN” (Triple-Net) lease is marketed as the holy grail. Amateur retail investors and out-of-state syndicators view these assets as impenetrable financial fortresses. They look at the marketing flyer, see a globally recognized corporate tenant, check the “NNN” box on their spreadsheet, and…