Do you want to start a strip mall business and you want to know the cost? If YES, here is an estimated cost breakdown to build and open a strip mall. In recent years, strip malls have started to remodel in order become a wonderful place for quick shoppers and aspiring entrepreneurs, especially since it offers visibility and ease of doing business.
Rents in strip malls are often cheaper than they would be in heavily – trafficked shopping centres or more upscale areas. In the United States, businesses in a strip mall are most likely among a lot of other businesses that people still actually walk into. Barber shops, coffee shops, sandwich shops, grocery stores, and nail salons are common strip mall tenants. These types of businesses are among the types that aren’t being swiftly swept away by online retailing.
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How Strip Mall Designs Affect Their Construction Cost
However, strip mall floor plans are always designed as commercial buildings to accommodate multiple businesses, retail spaces or offices. These spaces feature various storefronts that are visible from a parking lot or roadway and are commonly constructed in developed neighbourhoods where there is a need for space to accommodate local businesses.
Strip mall buildings are available in various styles and range in size. They typically accommodate three or more tenants and feature glass storefronts and separate entries for each tenant. Most strip mall designs are one level, but some may have multiple levels. Commercial building plans offer an alternative to strip mall designs.
Strip mall plans and designs are made to suit private practice medical offices, restaurants, and small businesses such as a bookstore, coffee shop, hair salon and more. They are also great for investment property with tenants paying rent for a space in the strip mall. Strip malls work well in suburban neighbourhoods as well as growing towns and cities.
The Estimated Cost Breakdown for Building a Strip Mall
Unsurprisingly, a small strip mall is less expensive to build. Usually, it consists of a street line with attached stores and on-street parking. Note that you don’t have to spend money on interconnecting walkways other than the main front thoroughfare.
Nor do you have to build parking structures, although you certainly can if that is part of your plan. In addition, there won’t be elaborate food courts and other amenities you would typically find in a shopping complex.
To properly estimate the cost of building your strip mall, you must first decide on the kind of tenants you want at the strip mall and price your construction accordingly. Clearly, your rental income projections must account for the types of tenants you attract.
These projections may tempt you to cut corners during construction, but nevertheless, you must build to the minimum safety codes. Typically, a minimum – cost small strip mall might cost about $250/square foot to build. Below is a cost breakdown of constructing a medium sized strip mall in the United States.
- Cost of acquiring the needed permits and licenses in the United States of America – $12,000
- Cost of employing a building consultant, architects and the writing of a well detailed plan – $25,000.
- Cost of building a contract strip mall in a good location ($250/square foot) – $1,750,000
- Cost of purchasing the needed insurance and liability protection for the mall (general liability and property casualty) at a total premium – $30,000.
- Other post – construction expenses including stationery ($500) and phone and utility deposits – $2,500
- Cost of acquiring finishing equipment (security, ventilation, signage) – $42, 000
- The cost of purchase and installation of CCTVs: $12,000
- Cost of launching a website and order processing software: $2,6000
- Shop marketing and promotion cost: $53,000
From the estimate above, you would need approximately $2,500,000 to build a medium – scale but standard strip mall in the United States of America.
How to Build a Strip Mall in 3 Steps
There are a series of steps you will need to build a strip mall. Those steps include the following items.
1. Site Selection
First you have to choose the land upon which you will construct your mall. Ideally, you want a location that is easy to access, and not too far from a nearby centre. The location ought to should provide space for parking and not create local traffic congestion. Ensure that the location is convenient for access by your target market. Also make sure your targeted customers can afford to shop at the tenant shops at the mall.
Frankly, some malls appeal to average-to-low-income customers, while others will market to the rich, educated elite. Another factor is age. Will you be targeting teenagers and young adults, or will you favour mature adults and seniors?
Perhaps you’ll go after a mix of all types of customers, but you’ll need to consider the pros and cons. Have it in mind that a mall that appeals to everyone may appeal to no one. However, a mall that targets a slice of the consumer market may be limiting its traffic.
2. Characteristics and Amenities
In this competitive age, successful strip malls are expected to follow a theme and include amenities like restaurants and other service providers. Will the mall have something different or unique to attract customers? At this point, it is very pertinent you research existing malls to see how they address these issues.
Clearly, you need to discover which approaches work and which don’t. Your research should include technical aspects such as tenancy mix, footfalls, best practices, and so forth. A major decision will be the size of the mall and the intended anchor tenants.
Note that the branding of your mall will precisely depend on its tenants, characteristics, and amenities. These incur costs beyond construction, but your branding plans can influence how you build the mall. For instance, malls with small discount stores tend to look different from one with upscale department stores and boutiques.
Naturally, your construction budget might be much lower if your mall consists of down – market tenants. These might include dollar stores, used – book stores, furniture consignment shops, and charitable recycled merchandise stores.
3. Operational Aspects
Also have it in mind that your building plans should account for the special requirements of a mall. For instance, you may need to include special facilities to support mall security that operates 24/7. You might want to include a first – aid centre to handle on-site injuries. You’ll also have to provide for cleaning and maintenance operations.
Note that some strip malls have on-site property managers and tenant recruiters. The extent to which your mall will have on – site support operations will most certainly affect the cost of construction. Another operational aspect that affects construction costs is your IT & technology plans.
New malls definitely favour high technology to deliver features like customer Wi – Fi and integrated security monitoring. This may require extra cabling and devices that add to the cost but pay for themselves over time.
Strip malls can be an excellent property investment if you do your homework first. Substantial due diligence is an involved process that requires access to data and expert analysis. You must make sure you pay the right amount and receive the appropriate return on your investment.