Are there any accounts of a real estate company buying up a large (or majority) share of the commercial real estate in a small town (population of 10K or less), packaging it up as a portfolio are selling it in the market? Maybe it's a total smooth brain idea, but an interesting thought exercise.
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I'm pretty sure this is how you end up in a Schitt's Creek situation
I feel like you'd just end up competing against and cannibalizing yourself
Try it out and lmk how it goes
Bedrock owns like 100 buildings and almost $6B of buildings in Detroit while multiple developments are going on as well. Idk what the total real estate value is downtown, but it seems like a lot.
At that point you either are paying to improve the city, or banking on some small developers joining in and doing that for you.
Yes... Larry Ellison owns all of Lanai (like... honestly I think he owns 99% of the island). He keeps buying too so it must be working, about a year ago I went there and he bought the only gas station in the town of Lanai City that week.
Not as a portfolio, but you see it all the time in smaller towns. More of a "rising tide lifts all boats" type of deal than a portfolio aggregation strategy. Most real estate is meant to be bought/developed and held long-term. I feel like that side of real estate is massively underlooked.
Not a small town but related owns a huge swath of office in palm beach.
in a small town what you are proposing is tough. A town of 10,000 in a rural area (im assuming that’s what you mean) probably doesn’t have a good job base. If the jobs go away, you tanked your investment. The reason the palm beach example is there is to show it can be done, but generally requires a bigger city
This is a strategy I've seen. In some small towns you can buy buildings for below replacement costs that cash flow.
If you want to go full feudal landlord on a small town and own everything, be prepared for a lot of backlash from the community.
I’ve been looking at a lot of small markets (10-20k people, 60-90 mins from a downtown area, not a ton of growth) and I’ve been having the same idea.
SUPER low liquidity. Not many people get excited to buy a 30 unit complex built in 1972 in tinytown, USA.
Typically the people who are selling want to cash out and retire and that presents great opportunities for cash flow. I’ve seen deals that could easily yield 10-12%.
Get enough of these things across the US or a region and you could bundle them and sell them off priced at a 8-9% yield and you’d see a nice payday.
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