04 Apr MANY REAL ESTATE INVESTORS ARE AVOIDING RETAIL
ATTENTION REAL ESTATE INVESTORS: K-MART AND SEARS ARE CLOSING MORE STORES, MANY OF WHICH HAVE ANCHORED MALLS. IF THESE LARGE, OLD TIME RETAILERS CAN’T FIND CUSTOMERS THE REST OF THE STORES IN THE MALLS CAN’T EITHER. MALLS ARE OBSOLETE…PASSÉ.
And no one cares.
Quaint downtowns are hanging on a bit better but they offer entertainment, unique handmade items, art, food and other attractions as well as shopping.
But what if we need things that are more routine and necessary. That’s not very entertaining. We’d rather just order and have it shipped and spend the rest of the day doing something else.
If a lot more people keep ordering anything we need on-line, stores of nearly any kind may become obsolete.
We recently remodeled a bathroom and ordered many of the fixtures on-line. It was really convenient. No extended trip to the DIY store necessary.
DIY stores are also taking a big hit from this growing trend.
For those of us who dislike shopping it’s the best way ever invented to get what we want. No shopping trip required. Whatever we need gets delivered to our door. Installations are easy. You can hire pros to do labor if you want. Jobs get completed much faster because you are not sitting around waiting for some essential part to arrive.
This whole thing is a real change in the way we do business.
You can order anything you want on-line.
People are doing it more and more.
Need diapers? Order electronically. No need to load up the baby, drive to the grocer, unload the baby and the diaper bag, lock the car, find a cart…etc., etc., etc.
So, what does it mean for investors?
What are the ramifications of this growing trend?
- First you might not want a storefront in any locality.
- You want a few strategically placed warehouses that can ship anywhere customers may live.
- Inventories have to stay current and efficient.
- Your customers shop on-line and expect prompt service.
- Whatever business you choose, you may not want to compete with Amazon.
- What type of business would you choose to take advantage of this new reality?
- Security for credit card buyers is critical and must be continually updated.
Many more traditional businesses will be impacted by this fundamental change in the ways people shop and what businesses will attract their attention. Lots of investors and REITS own malls that are sitting empty.
This type of property can be repurposed.
But for investors the question is always…
What is my best opportunity? What will give us the best payoff? Any investment, by definition is supposed to make money.
What do these trends mean for a savvy investor? Good investor…the best ones…make money from investments others miss. Now there’s a challenge.