We are excited to announce that BLVD is under contract on a building in White Bear Lake, Minnesota, primarily comprised of retail tenants. While our focus remains on multifamily properties, we are thrilled to diversify our portfolio within the retail space. This week’s article will explore why retail properties are a valuable addition to our portfolio.

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Why Retail?

Triple Net Leases (NNN)

One of the key advantages of this retail property is the presence of Triple Net (NNN) leases. Under these leases, tenants are responsible for paying rent and covering all expenses associated with running their business, including property taxes, insurance, and maintenance costs. This significantly reduces the financial burden on investors and protects them from rising costs.

With NNN leases, many management responsibilities are transferred to the tenants, reducing the need for day-to-day oversight and lowering management overhead. Additionally, properties with NNN leases maintain their value due to their ability to generate consistent and reliable income, making them very attractive to future buyers and potentially leading to solid resale values.

Strong Retail Market Performance

Retail properties are experiencing strong market performance, with leasing activity at an all-time high. Across the United States, the time required to lease retail space is currently the shortest it’s been in 20 years. The reduced leasing time indicates a competitive market where retail spaces are quickly occupied by businesses eager to secure prime locations. This dynamic not only highlights the strength of the retail sector but also underscores the potential for attractive returns on investment. With demand for retail space high and turnover rates low, investors can benefit from a thriving market that supports quicker lease agreements and potentially higher rental income.

Longer Lease Terms

Retail properties often offer long lease terms, with five or more years being common. These extended lease terms provide solid income stability and predictability for investors, as they ensure a steady rental income over a longer period. Long-term leases also create strong tenant relationships and reduce the frequency of tenant turnover, further enhancing the property's value and appeal.

Minimal Maintenance Requirements

Retail properties are often considered a low-maintenance asset class, offering a distinct advantage for investors. Unlike other property types that require ongoing attention to a multitude of fixtures and appliances, retail properties typically shift much of the maintenance responsibility to the tenants. In a retail setting, tenants are usually responsible for maintaining their equipment and fixtures, such as display units, lighting, and HVAC systems. This arrangement significantly reduces the maintenance burden on the property owner.

By having tenants handle the upkeep and repairs of their individual spaces, investors can focus more on strategic property management and less on day-to-day maintenance issues. This not only leads to lower operational costs but also simplifies property oversight, making retail properties an attractive option for those seeking a more hands-off investment.

Landlord Friendly, Less Government Oversight

Retail properties are often considered landlord-friendly due to their minimal government oversight. Retail leases are flexible and involve limited regulations. This flexibility allows landlords and tenants to negotiate terms that meet their specific needs without significant regulatory constraints. As a result, property management becomes more straightforward, and landlords retain greater control over their investments.

In Conclusion

In summary, our investment in the retail building in White Bear Lake represents a strategic move to diversify our portfolio and capitalize on the current strength of the retail market. Retail properties offer a range of benefits including the option for Triple Net (NNN) leases that shift operational costs to tenants, longer lease terms providing stable income, low maintenance requirements that ease management responsibilities, and minimal government oversight allowing for flexible lease negotiations. These factors make retail properties a strategic and valuable addition to our investment strategy.

Thank you for reading and your interest in BLVD Ventures. We look forward to having you follow along. Feel free to reach out anytime with questions and connect with us further using the button below.