When it comes to commercial real estate, strip malls are a popular investment option for developers and investors alike. Strip malls typically consist of a row of storefronts that share a common parking lot and offer a mix of retail, restaurant, and service-oriented businesses. While some investors prefer to develop a new strip mall from scratch, others opt to rehabilitate an existing one. In this article, we will explore the differences between developing a strip mall and rehabbing an old strip mall.
Developing a Strip Mall
Developing a strip mall involves starting from scratch and building a new commercial property on a piece of land. This process can be time-consuming and expensive, but it offers several advantages over rehabbing an old strip mall. One of the most significant benefits of developing a new strip mall is that developers have complete control over the design and layout of the property. They can customize the property to meet the needs of tenants and ensure that it is designed to attract foot traffic.
Developers who choose to develop a new strip mall also have the advantage of being able to choose the location of the property. They can select a piece of land that is in a desirable location and has good visibility, which can help attract tenants and customers.
Another advantage of developing a new strip mall is that developers can use modern construction techniques and materials to create a more energy-efficient and environmentally-friendly property. This can help reduce operating costs and appeal to environmentally-conscious tenants and customers.
However, developing a new strip mall also comes with some challenges. One of the biggest challenges is securing financing for the project. Building a new strip mall requires a significant amount of capital, and lenders may be hesitant to finance such a project, particularly if there is uncertainty around the demand for commercial space in the area.
Developing a new strip mall also requires careful planning and project management to ensure that the property is completed on time and within budget. Delays in construction or cost overruns can eat into profits and delay the opening of the property.
Rehabbing an Old Strip Mall
Rehabbing an old strip mall involves renovating an existing commercial property to make it more attractive to tenants and customers. This process can be less expensive than developing a new strip mall, but it comes with its own set of challenges.
One of the most significant advantages of rehabbing an old strip mall is that the property is already in a desirable location. Older strip malls are often located in established neighborhoods with good visibility and access to major roads, which can be a significant advantage in attracting tenants and customers.
Rehabbing an old strip mall can also be a more environmentally-friendly option than developing a new property. By repurposing an existing building, developers can reduce the amount of waste generated by the construction process and reduce the environmental impact of the project.
However, rehabbing an old strip mall can be a complex process. The property may require extensive renovations to bring it up to modern standards, which can be expensive and time-consuming. Developers must also be mindful of any zoning or building code requirements that must be met before the property can be opened for business.
Another challenge of rehabbing an old strip mall is that the property may have a negative reputation among tenants and customers. If the property has been poorly maintained or has a history of high tenant turnover, it may be difficult to attract new tenants and customers.
In addition, rehabbing an old strip mall may not offer the same level of design flexibility as developing a new property. Developers may be limited by the existing layout and structure of the building, which can make it difficult to create a space that meets the needs of tenants and customers.
Which Option Is Right for You?
Deciding whether to develop a new strip mall or rehab an old one depends on a variety of factors, including your budget, timeline, and goals for the property. Developing a new strip
Last modified: March 21, 2023
