Using Leases to Tap Into Affluent Markets in Texas
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Leasing is red hot, and we’re pretty excited to see the possibilities to make leasing even better for savvy minded real estate enthusiasts. Hey, we’re including the entire real estate party here, not just the investors.
If you’re on the look out for deals and opportunities for other people in your real estate network, you can cut yourself a nice check and not have to get into all of the daily details after the deal is finished.
In real estate, we talk about bird dogs, investors, brokers, agents, syndicate partnerships, and a whole range of different players. Yet it’s not about the player. The real estate game is longer than meets the eye.
Our favorite saying lately is about standing on the shoulders of giants, and if you want to really see far in 2022, you need to go back to see what the big players are doing.
Retail Is Coming Back More Times Than the McRib
We aren’t here to argue whether or not you like the McRib sandwich. If you’ve gotten tired of it, don’t worry: McDonald’s will get rid of it for a while and bring it back right as you’ve forgotten it exists. But what we can’t forget about is retail, even though a lot of people are ready to send flowers and condolences.
Retail is alive and well in the world of commercial real estate. Down in Texas, Whitestone REIT picked up a multi-unit retail space in Austin called Anderson Arbor. It’s nearly 90,000 square feet of space, so it goes without saying this is a multi-million dollar deal.
Here’s why the deal is so interesting: it isn’t just about the retail space, but the area around it. The median home value in the 78570 zip code area around the shopping center is $662,600.
That type of home value usually comes with a strong household income, which in turn means that there’s money to flow through the community. People like shopping, and giving people what they need is the cornerstone of commercial real estate.
The Midland, TX Metro: Leasing for Profit and Power
So, you’re not a big fish yet, and you’re wondering how to get in on the action. Maybe you’re thinking about rounding up an investment team and heading down to explore the opportunities. Sure, you could do that.
You could purchase in the area, but you could also shortcut through a lot of issues and just pursue leasing instead.
Remember that the key point of the Austin-area retail space purchase is affluent markets. That’s what you’ll also find in Midland, TX, a city that’s between Fort Worth and El Paso but truly a place of its own. The town exploded in terms of population, and the city is not only growing, but it’s continuing to remain as affluent as ever.
Retail space for lease in Midland, TX is still cost-effective, though not necessarily cheap. Yet incentives exist to entice new businesses to settle into the area. The incentives might sound a little strange; after all, why would a city subsidize costs for new businesses that might not become profitable for a while?
The Reality of Incentives
The truth is that incentives are designed to not just get you in but to keep you there. It isn’t just money either: the city of Midland knows that entrepreneurs need support, and they’ve focused on bringing not just blank checks but people that genuinely care about who is in the business space, and what vision they have.
Sure, the focus is naturally on people already in the area, but don’t let that stop you. Leases let both parties test the waters, so to speak. The city can hear about your idea and look at retail space that would align with that. If you aren’t native to Midland, figuring out location as an outsider can be tricky.
It makes sense to use all resources to your advantage.
Negotiating Good Leasing Structures
We can certainly recommend one type of lease over another, but a good lease isn’t so much about the format as it is the contents. For example, how much is the monthly cost? Cost is definitely a factor, but it has to be measured in terms of the usable square footage that you have to put to work in your upcoming business.
Another aspect of a good lease is having the amenities explained. Is the property owner going to handle the maintenance, or will that be something that you have to consider? Can you make modifications?
If you do make modifications or plan to in the future, it’s wise to look at what term the property owner is ultimately looking for. Does that term fit into your plans for the space? Will you be able to test the profitability without tying yourself down for too long?
Tangling With Lease Terms
You might be tempted to try to negotiate down the lease to a six-month term, which sounds better than a year. However, think long-term about how it looks to the greater business community. Are they going to be as helpful if you’re signaling that you’re not sticking around for a while?
Sure, there is no point in staying somewhere that isn’t profitable. However, your business may depend on needing to stick it out for longer than you anticipated, and that’s completely fine.
Focus on building a win-win situation that works for you and the property owner rather than stress about the exact lease term.
Finding Retail Space for Rent in Midland, TX
If your idea takes off, you can always extend the lease, which would make the property owner happy that they don’t have to worry about any vacancies, or you can make an offer to buy the building outright. The right path is going to depend on the unique points of the situation.
We get into commercial real estate knowing that there are risks. Yet pursuing retail space for rent in Midland, TX means that you’ll be tapping into an affluent market that loves new experiences. What could be better than that?
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