An Introduction To NNN Investing
Retail Categories
The Investment
Types of Sellers
The Buying Process
Market Analysis
Highest and Best Use Explained
Location and Site Analysis
Financial Feasibility
Industry Trends
Due Diligence
Financing
Low Risks of Default
Sample Lease Agreement
Sample Letter of Intent
Sample Commercial Inspection Report
Location/ Site Feasibility
There is an adage worth remembering and that is a “superior location and average tenant is superior to an average location and a superior tenant.” Remember, you are buying real estate not just the lease.
Assuming the market feasibility indicates a favorable, or positive gap between supply and demand, a suitable site will be found and researched. Sites refers to one of many properties within a general location. A location is a general area around a site or a sub market that contains many sites that share the similar characteristics such as zoning, and demographics.
The location analysis is focused on the functional feasibility of the area. Characteristics that include demographics, competition, traffic generators (other stores that draw shoppers to the area) and accessibility.
The site analysis tends to be specific to the technical aspects. These are the physical characteristics of the property that enhance or limit the property’s use. (ie: size, shape.) It addresses regulatory requirements, such as zoning and environmental factors such as (wetlands) or hazardous materials.
Various technologies exist that combine census data, mapping and GIS (geographical information systems). These technologies are used to evaluate demographics, income, spending and competition around a site.
Customers for a specific product or service have similar characteristics. Those characteristics may be family size, age, income, employment, race or a variety of other things. Analyzing census data around a location or around a specific sight can answer those questions.
A Geographical Information System (GIS) system is used to map census data. This data is used to compare similar data for other locations in order to chose the location with the highest revenue potential.
Although data is collected at all geographic levels, census tract or the “ block level” is the most popular for local businesses.