How are we feeling about retail in an area geared towards multi-family?
I am seeing less retail space being built outside of mixed-use developments in primary markets. You would think that with all this density growth in major MSAs that someone would be smart enough to place a few retail centers within walking distance. Not asking for the moon just 5-6 units with tenants that would stand to benefit (virtual golf, daycare, print shop, coffee shop, ext). I understand that parking seems to be the biggest hurdle, with limited space it would be hard to increase your occupancy, but a simple 900 sqft pop-up space would go a long way and allow for more flexibility.
[{"id": "iwriiui", "text": "Idk where you\u2019re at but most new mf builds have ground floor retail in them.", "replies": [{"id": "iwrqjhn", "text": "Don't think it's most, but it's also mostly a bad idea required by cities in order to get planning approval.  \n\nGround floor retail needs easy access and lots of people walking around.  In my market, that's not the norm and so retail either sits vacant, pays no rent, or gets converted to something else so you don't have ugly, vacant boxes on the ground floor.", "replies": [{"id": "iwrrkty", "text": "Totally agree. Very, very hard to pull off successfully. But it\u2019s a hell of a lot more common these days in urban builds than ever before.", "replies": [{"id": "iwrsq76", "text": "It\u2019d be interesting to see hard data on how successful it is. Anecdotally, my clients hate it and ascribe zero value to that component of a development.", "replies": [{"id": "iwrxsxl", "text": "Success varies + is mostly dependent on density, walkability/bikeability, and surrounding land uses. A coffee shop in the ground floor of a building in a downtown urban area is going to be a lot more valuable/viable than that same coffee shop in the suburbs, not on a transit corridor. \n\nUsually the retail needs a customer base larger than the residents of the building to survive.", "replies": [{"id": "iwsc46x", "text": "Agree with everything you say except I\u2019d strike \u201cusually\u201d from the second paragraph.  400 units over retail won\u2019t make it survive. \n\nI\u2019m not a retail guy, but my understanding is they look at miles of trade areas to determine economic feasibility.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "iwsqkf3", "text": "Except that was the dominant form of retail until the 1950s.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iwrm7tc", "text": "Interestingly data shows multi-family is not driving the same tenant migration as it once was. Instead tenants are beginning to flock more towards single family home developments. Your question is market and site specific.", "replies": [{"id": "iwrqzp6", "text": "The 4 markets, I am referring to are DFW TX, Austin TX, Oklahoma City OK, and Hotsprings AR.  I am seeing more MF pop up like crazy. I live in DFW, but I develop outside of the top MSAs.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iwupf06", "text": "I get this question all the time from my clients whatever property you purchase it doesn't matter you need to make sure to get your cost segregation study done so you can significantly reduce your tax liability and increase your cash flow on ANY commercial properties excluding carwashes, as long as you're going to hold them for three or more years.\n\nOffice/Warehouse, Fremont, CA\nPurchased 06/2021, appx 28,000 sf\nPP $6,250,000 (of which $3,750,000 is total depreciable basis)\n\nOwner's 2021 depreciation expense without cost segregation - $48,077\n\nOwner's 2020 depreciable expense with cost segregation - $1,339,030 \n\n(accelerated amount was 35 %)\n\nthat's huge right now we are at 100% bonus depreciation. Beginning January 1, 2023. It's going to go down to 80% with a five year step down phase out so get it while you can.\n\nif you have questions, feel free to DM me.", "replies": [{"id": "iwxi371", "text": "I love Cost Seg and Bonus Depreciation, hit me up. I'd love to connect further on this.", "replies": [], "depth": 2}], "depth": 1}]