A great location has a clear title. In the mad rush to close on a deal, it's amazing how many critical details get overlooked or ignored. Sellers of real estate may feel like they've won when a buyer or a buyer's broker doesn't ask a dreaded question or request deal-threatening information. A buyer may think that they've pulled the wool over an owner's eyes when their low-ball offer gets accepted with no counteroffer. For fear of losing a 'can't miss' deal, the buyer doesn't want to ask too m
A great location maintains low utility costs. The reality of retail is that the cost of goods, labor and construction increase every year. While a landlord's base rent costs are linked to the historical success of a particular location, the level of tenant finish, tenant improvement allowance made available and absorption, base rent is negotiable. As you know, base rent isn't the only cost that a tenant has to pay. Triple nets, NNNs, or additional rent elements such as common area maintenance
A great location has an abundance of natural light. Sunshine feels good. It's warm. It's inspiring. It's relaxing. People like sunshine and natural light. So why not invest in real estate markets or specific locations where the rays of the warming sun are plentiful? Outside of our major U.S. urban cores, some of the greatest retail and restaurant volumes are found in warm, sunny climates. San Diego, Denver, Honolulu, Los Angeles, Las Vegas, Miami, Dallas, Houston, Phoenix are all examples
A great location is the sole provider of goods or services within a drive time of 30 minutes or more. Have you ever been on a road trip and stopped for gas in Where-the-what, USA? As your gas pumps slowly, you lean your back against the rear door of your car, and survey the main street. The weathered wood siding and corrugated metal awnings frame what is supposed to be a town square and you ponder, "squares don't have three sides..." Your mild confusion is interrupted by the click of
A great location is west-facing. Tenants operating restaurants with patios are the most likely candidates that will seek a west-facing location. By definition, these locations are hard to come by. When on a mission for acquisition or a lease, you have to act fast! Landlords can usually command a premium for a great location with an unobstructed western facade. Tenants may initially balk at the notion of paying more rent just to see the sun set. I respectfully remind those tenants that the
A great location has high traffic counts. By car, by train, by rickshaw, by scooter, by foot or by bicycle, a great location needs lots of traffic to be successful. Lots. In an ideal situation, the traffic is constant. It is possible for a business to be successful with intermittent consumer visits and even cyclical ones. Beach and mountain retail environments function within this paradigm. It is, however, preferred that consumers frequent a retail location on a regular, high-volume basis.
A great location has low insurance costs. It seems that every day there are new ways to insure assets. Once upon a time, you could only insure property. Now, you can insure ideas, your nose, your pet, etc. So, we all know that we need to have insurance. That's a given. The cost of that insurance is what varies across state, county, municipal and even neighborhood lines. I won't attempt to illustrate an actuarial table in this post. I will tell you that the way that insurance prices are cal