While many investors lost money in multi-family and office properties over the last few years, retail investors who purchased commercial strip and shopping centers have nothing to complain about. That’s because it’s been the most profitable commercial investment property type during the last few years.
Retail has outperformed other sectors, with vacancy rates dropping to 6.9 percent in strip and shopping centers, while shopping mall vacancy rates have dropped to 5.6 percent.
When compared to office properties, which have a vacancy rate of 16.9 percent, and apartment buildings, which have increased vacancy rates from 3.2 percent to 6.9 percent during the last few years, it’s pretty clear that retail is being rented more often by tenants than the latter two, making those properties better investments.
Jarrid Tollin, executive Vice President of Newark & Co., says aggressive deals are being made in retail.
“In order to entice the better tenants, they are getting better rents and more incentives in construction allowances and free rent in order to make the deals.”
Information from REALTOR Magazine Daily News was used for this report.