Flipping homes is super popular these days, but have you ever heard of flipping and redeveloping shopping centers? Ben Hamd and Wyatt Woeltje of Brookwood Capital Advisors, a real estate redevelopment firm, do just that.
Question: What is retail re-development?
Ben and Wyatt: Retail redevelopment is the process of buying empty or semi-empty shopping centers and re-filling them with tenants so that the center is active again. Basically, we buy empty retail centers and fill them.
Question: How does a “flip” come into play?
Ben and Wyatt: Well, most flips are all about fixing up a house—think subway tiles, HGTV, but commercial is about stabilizing a center with a good anchor tenant, putting systems in place so the center stays taken care of with good managers.
We did a former grocery center in Cochran, Georgia last year—the center was literally empty.
We convinced the regional discount grocery store and gave them five years of free rent to come by our store again. Seems kinda crazy, but it worked cause the rest of the spaces filled up at decent rates and we were able to make money again and bring a grocery store back to this town. The center was then sold to a local investment group who will hold it long term, so there’s the flip part of it, buying risky empty assets, doing the work to fill them, and then sometimes “flipping them.”
Question: How do you just call up a grocery store chain?
Ben and Wyatt: Honestly, a lot of trial and error. You can’t just call up a grocery store chain, but sometimes they have real estate people, which in this case, I found the owner’s contact information and literally called him every day. In this case, persistence was key. I probably called him fifty times before he agreed to do a deal, and I had to give him the deal of a lifetime to make that happen.
We also do a lot on socials, which is unusual for shopping centers. We did a project last year in Memphis where we rented up the entire center to local tenants ONLY using Facebook ads. It’s a little more complicated than that, but it ended up on the news a bunch of times.
Question: What are you guys working on now?
Ben and Wyatt: More of the same really. We are redeveloping a project in Southern Indiana right now that Stein Mart blew out of [they declared bankruptcy]. The good thing about what we do know is we’ve been “flipping” for 7 years now, that we already have a lot of relationships built up so that Stein Mart space will be filled with a regional furniture store fast. We just want to keep buying centers especially now when so many people are afraid of retail—we’re the exact opposite, we only do retail. We eat sleep and breathe it.
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