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Factors That Affect the Value of a Shopping Center

Feb 28

Several factors affect the value of a shopping center. The visibility of the mall plays a crucial role in determining the value of the property. Stores with poor visibility have lower rent rates and less foot traffic. When calculating the price of a shopping center, appraisers use the average store rent rates for the entire mall. A lower rent rate means lower tenant sales, which in turn results in a decreased value.

The location of the shopping center is another important consideration. The location and configuration of stores will affect their value. For example, stores in the elbow positions sit closer to the road than those on end caps, which will result in lower visibility. The optimal configuration would yield end caps to smaller retailers while drawing traffic from big box destination tenants. It is important to consider the location and visibility of the retail space when assessing its value.

The vacancy rate of a shopping center is often determined by a comparison of nearby properties. While it may be more convenient to compare shopping centers within a three-mile radius, shopping centers are not passive assets. Moreover, these centers are subject to taxation, so the appraiser must consider the non-real estate value before investing. However, in the case of pension fund investments, the appraiser must take into consideration the tax implications of investing in a non-real estate asset. The valuation of the retail property will depend on the type of investor and the investment.

Commercial retail space comes in many forms, with each having its advantages and disadvantages. Choosing the right location is essential for any brick and mortar business. The type of space you rent or buy will determine several aspects of your business, including sales and customer acquisition. A shopping center will usually have three to five large anchor stores and dozens of smaller retail stores. A crowded shopping center can have many problems, and it's best to choose a location that's easy to access and has lots of foot traffic. Shopping centers are as valuable as their location.