Neighborhood strip centers in transitioning areas- putting lipstick on a pig
I bought an ugly strip center in a rough neighborhood in Dallas with about 8k sqft rentable. Bars on the windows, crime. Code violations, lots of deferred maintenance but good roof, bones and parking lot. One good tenant and one c-store tenant I terminated because they facilitated much of the crime..

I'd like to discuss initial upgrades while the surrounding neighborhood gentrifies (over the next 10 years). The types of things i have in mind are riot glass storefronts to replace the bars, and inexpensive signage and facade changes, and a bit of landscaping to make the transition from scary to not scary. Not "fancy"  changes-just transition changes that add value.

Also. Any ideas for potential tenants that can capitalize on the c-store space with a huge walk-in. The location is a PD (planned development) but my location is the only location in the entire PD that is allowed to sell alcohol. I've been thinking deli/catering co that would also sell alcohol for on premises and take away consumption. I have an adjacent lot that could accommodate a food truck and outdoor seating with alcohol sold from the c-store location.

Anyone have experience with this?

Just for perspective on me, I've been in the RE  brokerage/investment biz for over 20 years in various aspects, im a real estate attorney, escrow officer, hardmoney lender. I touch about 300 transactions a year through client matters and closings, but I've never owned this particular type of property. I have good access to capital and only buy deals i can prove highly profitable on the " back of a napkin". I prefer fixing up dangerous places to buying retail.

If there is another reddit or other online forum that is more focused on these issues or types of properties, please let me know.
[{"id": "gfxh4t4", "text": "Some more off the cuff idea's for this type of property:\n\n&amp;#x200B;\n\n1. Have it be hyper clean (relatively cheap)\n2. Update the signage and lighting.\n3. Improve the lot/striping. You want to make it as inviting as possible to pull into after work. \n\nThe food truck idea sounds cool, would look into permitting. If I was going to remove the bars, and change the windows I would probably do that as part of a bigger facelift.", "replies": [{"id": "gfxzeda", "text": "There are the top 3 changes I'm making other than removing the bars and replacing all the storefront windows and doors.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfxm5ff", "text": "What type of sketchy? Like Harry Hines or South Oak Cliff?", "replies": [{"id": "gfxywcl", "text": "East Dallas, Mount Auburn area between East Grand and Columbia", "replies": [{"id": "gfyadcm", "text": "So first off you\u2019re definately in the path of growth! Is it one of those strips off 30 on the way to White Rock Lake?\n\nAnyways I\u2019ve flipped a slightly larger strip before in a worse neighborhood in Baltimore / DC / Philly - biggest thing is (1) hiring off hours security to move the drug dealers and stuff off your property (2) do beautification- flowers, paint job, seal/stripe and like picking up trash goes a long way to improve the center (3) who put up the bars - the tenants or the prior LL? I\u2019ve never heard of unbreakable glass, your tenants might not want it. You could go to glass but might need to install those metal rollers which really isn\u2019t ideal use either. \n\nAnd hey, could be worse you could have the 711 down by the west end station. Good luck!!", "replies": [{"id": "gfyi5kf", "text": "Right area, but nestled more in the neighborhood. Tenant put up the bars as for as i know. It looks terrible.  I'm putting in insulated glass with 4mil security film. Look up \"Riot Glass\" for demo videos. It pricy but looks effective. Roll shutters are an option but expensive.", "replies": [{"id": "gfz8b3n", "text": "Yea tough call my shopping center in the hood was big enough to hire security which kept it kind of safe; no bars or roller windows though. How much vacancy do you have right now wondering if it\u2019s accretive holistic capex to fix it now or wait a bit and see what happens? I mean end of the day you are solidly in the path of growth but probably won\u2019t be the change agent for gentrification.... just kind of need to ride the wave", "replies": [{"id": "gfzfjar", "text": "One tenant occupies all but one vacant space and it cashflows with that one tenant (they have been there for 30 years). This is the lipstick on the pig phase to move from slummy to not scary. I'll ride the not scary wave for 10 years with renovation that i will earn back in less than 18 months.", "replies": [{"id": "gg02laq", "text": "\ud83d\udc4d like the plan! Just keep it clean and wait to roll the rent roll. How big is the center - sounds like a solid private buy. Bet your basis is crazy low too", "replies": [{"id": "gg08s1o", "text": "It was a golden opportunity. Shaking the c-store fellas was a bit dicey but scored points with the city and its good for the neighborhood. It will put both my kids through college- or one and a beach house in Costa Rica.", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "gfzgjpr", "text": "That 7-11 is a spectacle. I remember when they had a problem with people losing their mind after smoking synthetic pot laced wit pcp or something (as if synthetic weed wasn't bad enough by itself) i think DPD determined they were buying from someone at the train station. The press described them as zombies. I always thought about that when I would go post foreclosures at the courthouse.", "replies": [{"id": "gg031ss", "text": "I stopped for gas there once at like 1130 at night - sketchiest 5 mins of my life and I\u2019m like a tall muscular dude, still afraid I\u2019d get like shot. Swear to god everyone was hitting me up for cash or trying to sell me drugs. \n\nOther great downtown experience was staying at like Adolphus or Joule, went out for a long jog and on my way back up main passing the McD\u2019s homeless guys were asking for money... like dude, I\u2019m hauling ass in running clothes do I look like I have spare change on me?\n\nAlso always hate it if I had to get off 35 onto Oaklawn and get stuck at those lights under the stemmons - sketchy as fuck with the meth zombies under the highway. \n\nGod bless Dallas, all that being said easily one of my favorite cities to visit.", "replies": [{"id": "gg082qt", "text": "I know that mcDonalds. Its always shady. They had to rebuild it after the superbowl parade/riot back in the 90s. You know all the best spots.", "replies": [{"id": "gg0xqeo", "text": "Ha, I\u2019ve just spent way too much time in the Big D, great place. Could crush some MiCo right now... flipping COVID travel restrictions", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfxmohv", "text": "Fresh coat of paint, repaving (or sealing) and restriping the parking lots, and general landscape/cleanup go a long way.", "replies": [{"id": "gg1ant3", "text": "Double down on this. I sold a building about 5 years ago in the Stemmons corridor that was...rough to say the least. Facade looked awful and had cheap wood nailed up to patch openings. Guy I sold it to is a friend of mine. New paint, new parking lot, fixed up the facade where it was in bad shape, took occupancy from 60-95% in less than two years. It's amazing what some good paint will do.", "replies": [{"id": "gg1kadb", "text": "Lipstick on the pig. Tried and true.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfxvtww", "text": "I would make sure security contract is in your budget.", "replies": [], "depth": 1}, {"id": "gfy1cwp", "text": "I\u2019d be careful with selling alcohol on the premise. We had a package store tenant in a similar building in Maine. The local vagrants would scrape together enough money to buy a 40 oz and would drink them on the sidewalk out front. Became a nasty scene at times.", "replies": [], "depth": 1}, {"id": "gfy3cnh", "text": "I\u2019d look in to a laundromat. Find a reputable owner and lock them in to a long term lease. Pay for the build out and they\u2019ll never leave", "replies": [{"id": "gfzh327", "text": "Already considered it and decided against it. I'm not against them at all, just not this project for lots of reasons. #1 being too many people lingering throughout the day. Not a good fit for this location.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfy3hra", "text": "Nice! Fellow CRE attorney from Dallas. I think tacos Y mas or cell phone stores would be interested like cricket wireless or an unbranded", "replies": [{"id": "gfy9nfk", "text": "Already a tacos y mas just a few blocks away. Looking at another acquisition where i would go the cell/insurance/check cashing/... tenant mix but looking for more of a hipster (do people still say that?) Use for this one. Rent is cheap and area is transitioning....slowly. I genuinely more concerned with improving the neighborhood with  something cool rather than maximizing return. Seems like a shame to not use the walk-in refrigeration.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfy65o7", "text": "I've lived in neighborhoods in transition for decades including SOHO in NYC, Brooklyn Hts, Park Slope in Brooklyn in the 1960s. In the 70s I moved west to San Francisco where the Mission and Potrero Hill were the kind of neighborhood you describe. The artists and creative people were always the first to take a chance and spot a good place at the right price. Put something in that will attract the adventurous arts/creative folks (studio space, gallery space, live-work opportunities, experimental off beat pop ups, etc.) keep the rents reasonable and offer big space with good light. Give it a couple of years gentrification will follow. When Covid is over consider adding a good Kosher deli (think Katz's). When Texas gets around to legalizing medical/recreational pot that would also be a good bet.", "replies": [{"id": "gfyan2l", "text": "Ha! I'm already looking at site selection for projects based on potential location criteria for dispensaries when the time comes. Too much residential here I'm afraid. Dallas  won't even allow paraphernalia sold within 150 ft of residential (at least i think this is current code). \nAlready in discussion with muralist for the exterior and agree about the adventurous artsy crowd blazing the trail, but i think were are past that now and its a viable location only 10 blocks from the boundary of one of Dallas' most desirable/expensive neighborhoods.", "replies": [{"id": "gfyihfg", "text": "I'm told that independent bookstores are making a comeback, especially the kind that carry older books, magazines and not just new books. I'd check the bookstore scene - Dallas is huge and there are lots of literate people, I bet you'd find a taker if the rent is low and the space is right, hard core book buyers don't care about the neighborhood. Same with collectible records, the kind made of vinyl. Audiophiles will travel to buy LPs, and pay pretty fancy prices too. See what's already open in your area and guesstimate if the fan base is big enough to expand. If there are no other places selling vintage audio that would be a good bet - vintage LPs bring the best prices because the sound quality is superior and the folks who care about that kind of thing will pay the price. Record players are back too.", "replies": [], "depth": 3}], "depth": 2}, {"id": "gg262g0", "text": "&gt;Came to post something similar. Years ago I met a real estate investor who's strategy was to buy in crappy parts of town and put artists and galleries in them. His theory was that it attracted people with money and eventually generated interest. He was an early investor in what's now one of the hottest parts of our city, for whatever that's worth.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfyrjzw", "text": "I love projects like this... The scrape and build nature of Dallas developers drives me crazy.\nWhat you're describing  reminds me of what Nathaniel Barrett did to the strip center over at Fitzhugh and Terry in East Dallas. https://lakewood.advocatemag.com/2017/06/23/rebuilding-not-replacing-old-east-dallas-nathaniel-barrett/", "replies": [{"id": "gfzgpgr", "text": "Im going to look up that dude. I live in east dallas. Sounds like my kind of guy.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfz6e4o", "text": "Maybe there's potential for an edgy coffee + craft beer/wine concept or something similar. It would pair well with the food truck, add outdoor seating (w/ planters, shade umbrellas, string lights). It's not far from the Santa Fe Trail, so I'm thinking a concept (like coffee + beer) that draws cyclists from White Rock or Deep Ellum might be cool.\n\nLooks like it's going to be a really fun project!", "replies": [{"id": "gfzhox5", "text": "Thats what im thinking too. You practically described my renderings. Craft beer and growler biz was even suggested by my local code compliance officer. When i bought it was a nuisance property riddled with violations. Was surprised when she suggested such a tenant. A deli. Box lunches for laborers...and beer, lots of beer.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfzr50w", "text": "Curious about the numbers on a project like this...", "replies": [], "depth": 1}, {"id": "gg0cose", "text": "Houstonian here. Check out tenants like the crafty crab. They take pretty big spaces and may be a good fit.", "replies": [], "depth": 1}, {"id": "ggrtfkh", "text": "I\u2019m thinking about converting some vacant class c retail into ghost kitchens. I can get better rents than a typical retail deal. Centrally located, high demand.", "replies": [{"id": "girzunn", "text": "Tell me more... I get about 3 calls a year for people looking for time share kitchens. Do you mind sharing details about operations, fixtures, marketing etc? This was my original idea for this location.", "replies": [], "depth": 2}], "depth": 1}]