Private Investors Seek Retail Real Estate

In recent years, the real estate industry has noticed some significant trends in the commercial and residential housing markets. For instance, in 2021, small and private investment firms were responsible for nearly 3/4 of retail asset acquisitions, representing a 30% increase from the prior 10-year historical average.

Moreover, earlier this year, a bidding war broke out over a 140,000-square-foot shopping center housed at Office Depot in Port Charlotte, Florida. We also saw investors purchasing retail properties such as Watters Creek in Texas, Galleria Edina in Minnesota, and Promenade at Carolina Reserve in South Carolina.

As a real estate agent, you want to understand what this increase in commercial real estate purchases means and how it might impact your business practices. In this article, we will explore the significance of this trend and the opportunities it can present for you as a real estate agent.

Why private investors want commercial real estate

To learn the importance of this trend, let’s first look at why we have seen such an increase in commercial real estate investments. Private investors are moving towards investments in the retail sector because of shifts in how consumers behave. The increase in suburban shopping and open-air shopping centers has sparked the interest of many investors

The pandemic has changed how businesses engage with consumers. The retail companies that navigated the early days of the pandemic and shifted to an online model find themselves in a position to thrive. Many customers still want to shop in person, even with online options. Many retailers have begun to look for opportunities to expand, but many end up competing for limited square footage.

This has created an environment where several private investors have shifted towards acquiring shopping centers because they see greater yields and more profits than other real estate types.

How this impact you as a real estate agent

Working with private investors is a great way to diversify your portfolio and build your business further. Here are some ways working with investors can benefit you:

1. Investors are always looking to buy and sell. Unlike typical clients who are maybe looking to buy a home every 5 to 10 years (or more), private investors are always on the market to buy or sell properties. Being a private investor’s go-to real estate agent could provide you with steady business in the long run.
2. Experienced investors could be easier to work with than residential clients in some ways. Since it’s not their first rodeo, most investors should know and understand the logistics of buying or selling properties. Therefore, you can bypass explaining the basics of an offer and just send them the contracts to sign. Seasoned investors would go as far as letting you know their preferred process that you can follow along. Lastly, when it comes to numbers, they’re prepared to negotiate or accept your commission rates, making it a smooth transaction for both parties.
3. Investors could turn into leads or referrals. The best part about working with private investors might be gaining more referrals or potential leads down the road. Even if the investor stops looking to buy or sell, they can refer you to their network or direct potential clients your way. Find ways to stay connected and be sure to nurture those relationships because you never know which one might be the best investment for your career.

McKissock Learning is the nation’s premier online real estate school, providing continuing education courses and professional development to hundreds of thousands of real estate agents across the country. As part of the Colibri Real Estate family of premier education brands, McKissock Learning, along with its sister schools Real Estate Express, Superior School of Real Estate, Allied Schools, The Institute for Luxury Home Marketing, Gold Coast Schools, The Rockwell Institute and Hondros Education Group, helps real estate professionals achieve sustainable success throughout each stage of their real estate career. Learn more at mckissock.com/real-estate.