Retail Shopping Centers - Growth
in the Commercial Market The retail shopping center provides an excellent introduction to
commercial income-producing property. Retail property management
requires more knowledge about tenants’ businesses than does
management of any other commercial income-producing property; often
the income from the property is directly related to the success of the
tenants’ businesses.Shopping center properties are relatively easy
to classified by size and retail market orientation. Once the property
has been classified, the analyst can identify the tenant mix, physical
requirements, and operating characteristics of each type of property.
To evaluate a shopping center property, however, real estate lenders
need to understand the concepts behind the design and location of
shopping centers.A tremendous growth in the number of shopping centers
and in the volume of retail sales in these centers has accompanied the
increase in population and affluence of Americans and the migration of
that affluent population to the suburbs. In the remainder of the
twentieth century, two major forces affected retailing and, therefore,
shopping centers. Demographers expected a significant shift in
population, housing, and retail sales from the industrialized
Northeast and central United States to the growing technological
centers in the South and West. Shopping center growth expected to
follow traditional population- driven patterns in these areas. The
second force was the continued growth of discount retailers and the
slow, and certainly not full, recovery of traditional full-service
retailers.During the 1980s retailers such as Federated Department
Stores and Macy’s, venerable names in full-service retailing, went
through leveraged buyouts. Amassing huge debt loads, they were unable
to weather the economic recession of the late 1980s and early 1990s
and filed for bankruptcy. Even those traditional retailers with strong
balance sheets and established names, such as Sears and J.C.
Chad Mayes is the creator of CEMLending
Connection, a resource which provides commercial
mortgage loan financing and residential refinance and
purchase options. This article is copyright of CEMLending
Connection. This article may be reproduced as long as
author's name and all links remain intact.
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