Neighborhood and Community Centers (NCC) are Recession‐Resistant
The market has failed to price neighborhood and community centers (NCC) efficiently. Malls enjoy an institutionally driven, not always deserved, premium and investors, since the Crash, have unjustly penalized NCC (to their detriment). There exists a dichotomy between NCC’s strong operational performance and its investment perception. NCC is much more recession resistant than malls, and we explore in this report scientific, evidence based reasons why this is the case NCC presents an arbitrage opportunity that the discerning institutional investor can systematically exploit with great profit.
Click below to download the exclusive research paper by Dr. Randy Zisler.Download
Investors have a limited understanding of the many kinds of retail real estate and how they differ. Neighborhood, community and strip centers (NCS) are a good example of this deficiency. When asked, what retail property type constitutes most of the retail inventory, many people would say, malls. They would be incorrect. If asked, which retail type presents the least risk, they might hesitate but would likely say, super regional malls. Again, they would be wrong. NCS provides very attractive risk-adjusted returns; it is a substitute for institutional-grade corporate bonds and it is internet resistant, unlike the malls. The webinar shows why NCS is in an investment class all its own. While mall rents have been declining and vacancy rates rising, NCS performance continues to strengthen. However, NCS cap rates are excessively high. The market fails to differentiate malls from NCS, but therein lies the investment opportunity.
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Todd Laurie, Partner, was featured on the RealCrowd Podcast, Fundamentals of Commercial Real Estate Investing. Laurie spoke to the core strategies of investing in commercial real estate, as well as Baceline’s unique position in the investment space.
David Puchi, Managing Partner, was featured on the Deeper Pockets Podcast, Recession-Resistant Investing & The Benefits of Buying Shopping Centers. Puchi not only discussed the advantages to investing in neighborhood shopping centers, but discussed the way Baceline applies this strategy within America’s Heartland.