Considering Pad Sites As A Commercial Real Estate Investment
A lot of business owners who are looking to grow and expand their business have to start looking for a new place in which to physically start growing which means that they will need the right retail space to do so. Unfortunately, a lot of shopping areas or storefronts that are located in strip malls or large shopping malls just are not large enough or the right type of space for their business. Since these spaces are not always the right thing to use for a new business or a growing business, considering pad sites as CRE investments can often be a lucrative way to maximize returns on available space. Pad sites can be a great alternative solution that will allow business owners to use a CRE parking lot to their advantage and choose a different type or style of building that they use for their business.
Years ago, pad sites were often considered not as good, or the leftovers of a commercial real estate parking lot that no one wanted to invest in. However, developers have really put in the time and money over the last few years and turned that viewpoint around and made people see them as a lucrative investment opportunity.
What exactly are commercial pad sites
A pad site can sound confusing but is ultimately not too difficult to understand. Simply put, it is a building lot that is very close or next door to an existing commercial building. It is typically adjacent or on the same property to an already standing commercial real estate building. Though the site is very close to existing commercial buildings, it is not connected which means they are in the same area as a large shopping center or Central Business District so traffic is already drummed up but they do not have the need or commitment of having to be attached to the main commercial building.
Why are pad sites becoming more popular and desirable?
The next question then is what are the advantages of a pad site deal? Considering pad sites as CRE investments, investors should know that these deals come with an amazing return on investment! They are typically located at the very front of a shopping plaza and can usually be seen easily from the street which means it is highly visible and can easily catch the eye of people driving by. They are also easy to get too since they are located in a parking lot so potential customers can easily access parking and walk right in.
It is a standalone building that is located within a larger plaza, but since it stands on its own they have all the attention on them. They can get set up and advertise the business without worrying about other businesses advertising themselves right beside them and competing with the customer base that they could be getting.
If a business owner decides to go with a pad site then they also have the opportunity to add in some unique customization. They can build on a drive thru or something else interesting that they could not do if the business was attached to a shopping mall or a strip mall.
A pad site is not considered to be a leftover or less-than-ideal commercial real estate property as it once was. When the business owner puts in the time and money it requires, a pad site can be a very lucrative real estate opportunity with low overhead and higher returns than you may have thought possible.
