Convenience Store Commercial Real Estate Property Prices Down
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Commercial Real Estate on Friday, November 30, 2012.
We've discussed how the California commercial real estate appears to be improving in the recent past. Commercial real estate property prices have risen approximately 34 percent across the country since the year 2010. One area which has apparently not followed this growing trend is that of convenience store property prices.
California is among three states which boast the highest number of convenience stores in the nation. These three states alone account for over one-fourth of all convenience stores in the U.S. In fact, there are more than 10,000 convenience stores in the state of California. Interestingly enough, however, property prices for convenience stores appear to be falling rather than rising.
In the third quarter of 2012, convenience store property prices dropped below the peak seen in 2007. They also dropped lower than the prices that were seen at the same time last year. Some industry experts believe that the reason for this drop in prices has to do with basic supply and demand. Statistics indicate that the growth in the convenience store market actually raced ahead of the population growth during the period from 2004 to 2008. Ultimately, this means that there are more stores per person now than in the past, reflecting an overabundance that does not match the actual demand.
Among the three states with the highest number of convenience stores-the other two being Texas and Florida-California actually enjoys the highest commercial real estate property prices in that sector. Our state has actually had an undersupply of convenience stores compared to its population. Hopefully, as the commercial real estate market picks up, the property prices of convenience stores will begin to rise as well. It may be a good time for investors who were considering getting into the convenience store market to research their options to do just that.
Source: Convenience Store News, "C-store Real Estate Prices Lag in Big Three States," Robert E. Bainbridge, Nov. 16, 2012