Experience-Based Retail Properties

A real estate investment strategy focused on retail properties that cater to specific consumer behaviors and demographics that are resistant to e-commerce disruption.

Target Categories:

• DIY and Craft Stores:

  • Examples: Hobby Lobby
  • Requires large physical spaces for inventory
  • Customers prefer seeing materials in person

• Treasure Hunt Retail:

  • Stores: TJ Maxx, Ross, Marshalls, HomeGoods
  • Shopping experience is part of the entertainment
  • Customers enjoy finding deals in person
  • Can't be replicated online effectively

• Low-End Retail:

  • Dollar stores and similar concepts
  • Often cheaper than online alternatives
  • No shipping costs for customers
  • Immediate access to products

• Demographics-Focused Retail:

  • Stores catering to Black and Latino communities
  • These groups tend to shop in-person more frequently
  • Shopping centers serve as community gathering spaces
  • Burlington Coat Factory cited as example

Business Model:

• Build relationships with major retailers
• Get early notice of expansion plans
• Invest in property improvements to attract tenants
• Create standardized, simple leases
• Focus on speed and efficiency in deal-making
• Maintain high deal volume (80-100 transactions per year)

The strategy has yielded significant returns, with one operator building a $1B portfolio ($600M equity) in 7 years by focusing on these resistant-to-ecommerce retail categories.