The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:
One common trend that’s seen often in retail repurposing is medical office spaces. Dentists or other medical professionals will lease these retail spaces, convert them extensively, and stay there for the duration of their practice. This is where you’ll get 10 year leases and steady tenants for many years.
Richard Wilson: Have you in your practice helped clients repurpose retail spaces into office use, or self-storage use, and helped a client go through some of those steps? Or is it really not super common that people are doing that because of the economic construction needed?
S.L. Van Der Zanden: Yeah, it’s not super common. We sold an old Giant Way grocery store to a self-storage guy, and we’ve definitely converted retail spaces into offices. Medical office, a lot of the medical profession is moving, independent guys are moving to retail spaces. That’s where you get a 10 year lease, because the quantity of plumbing that goes into it, a dentists’ office or whatever, it’s insane. They’re there for life, that’s the good news, and they’re generally good for it until they retire, and then hopefully they sell it to a successful young aspiring dentist.
Richard: Right, right. Great, okay.