OK so retail gets a bad rap. Everyone talks about the “retail apocalypse” and dead malls and Amazon killing everything. And look, some of that is true. But the retail I buy in the Carolinas? Totally different story.
Strip centers with service tenants. Small standalone buildings with drive-throughs. Neighborhood retail with a nail salon, a barber shop, a pizza place, maybe a tax prep office. These aren’t getting disrupted by e-commerce. Nobody’s ordering a haircut on Amazon.
That said, retail is tricky to sell. Buyers are pickier about it than they are about industrial or flex. Here’s why.
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Tenant Duration: Tenants with 10+ years on location command stronger valuations than those with 3-year leases, regardless of sales performance. -
Service vs. Retail Mix: Hair salons, tax prep, and plumbing services outperform restaurants and retail in terms of stability and buyer confidence. -
Lease Language: Weak leases with no renewal options or rent escalators reduce buyer interest. Real option value comes from enforced rent adjustments. -
Parking Count: Count actual spaces. Undersized parking on food service will cost you 10-15% of valuation — buyers know turnover will spike.
Tenant quality matters way more
A flex building with an HVAC contractor is pretty safe. The guy needs a shop, he’s not leaving. A retail tenant? Could be a different story. Restaurants fail all the time. Small retailers too. So when I’m looking at a retail property, I want to know how long the tenants have been there, what their sales look like, and whether the leases have any teeth.
What strengthens retail pricing
- Tenants with 7+ year tenure at location
- Main road frontage with strong daily traffic
- 4-5 spaces per 1,000 SF minimum
- Service tenants (not restaurants or fashion retail)
What gives buyers leverage
- New tenants on short leases (under 3 years)
- Off-street location with limited visibility
- Inadequate or shared parking
- Rents below market rates that haven’t been pushed in years
Had a deal in Greensboro last year. Strip center, five units. Two of the tenants had been there 10+ years. The other three were newer, all on 3-year leases. The owner wanted $1.8M. I came in at $1.55M because honestly, two of those newer tenants felt shaky. One was a smoothie shop that had only been open nine months. Three months later that smoothie shop was gone. These things happen.
Traffic and visibility
Retail lives and dies on this. A building tucked behind another building off a side street? Rough. Same square footage on a main road with 20,000 cars a day? Completely different value. I can fix a roof. I can’t fix bad visibility.
Parking ratios matter too. Retail wants 4-5 spaces per 1,000 SF minimum. Less than that and tenants struggle. Especially food service tenants. They need parking during lunch rush or they’re dead.
Where I’m buying
I buy retail in Myrtle Beach, Charleston, the Charlotte suburbs, and the Triad. But I’m selective. The deals that work for me are the ones where the property has strong bones and decent location but the rents or management are behind the market. Maybe the owner hasn’t pushed rents in five years. Maybe there’s a vacant unit that just needs some TI to fill. That’s where I can add value.
What I pass on: single-tenant retail with a credit tenant on a long-term lease at a 5% cap. Those deals are for REITs and institutional buyers. Not my game. I’m looking for the messier stuff that bigger players won’t touch.
If you’ve got a retail property in NC or SC and you’re wondering what it’s worth, call me. I’ll give you a straight answer. No listing, no commission, no open houses where your tenants get spooked.
Seller takeaway
If you own retail in NC or SC and want to know what it’s worth, call Roth Capital at 704-600-3839. Jim Kittridge will give you a straight answer on tenant quality and location value without listing pressure.
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