In the world of commercial real estate, location is often hailed as one of, if not the most important factors in determining the success of a business or property investment. However, it’s essential to recognize that the “best” location isn’t always the bustling city center or the busiest corner in town. Sometimes, a prime piece of real estate lies off the beaten path, where opportunities are abundant and competition is minimal. This informative guide will explore the 7 reasons why remote locations can outperform urban centers in commercial real estate.
1. Accessibility and Convenience
Accessibility remains a key reason in commercial real estate. While city centers and commercial districts offer convenience due to established infrastructure, properties in less urbanized areas can also provide significant advantages. Take, for instance, a gas station on a remote highway in Georgia. Positioned strategically on a long stretch of road with minimal competition, this business could see high profitability due to the lack of nearby alternatives.
For many customers, convenience doesn’t always mean being in the middle of a busy city; it means having what they need when they need it, even in more isolated locations.
2. Lower Real Estate Costs
While cities offer high visibility and foot traffic, they come with a significant downside: high real estate prices. The barrier to entry in urban areas can be substantial, requiring more capital upfront and potentially leading to higher operational costs. For small businesses or new investors, this can be a deterrent.
Rural or less congested areas, on the other hand, often come with more affordable property prices. This can mean a better return on investment and lower financial risk. If a commercial property in a more remote location can tap into a steady stream of customers—like travelers on a highway or residents in an underserved community—it can provide excellent value without the hefty price tag of city real estate.
3. Unique Competitive Advantage
In many cases, being the only business of your kind in a specific location can be a massive advantage. While competition in urban areas can be fierce, positioning a business in a rural or less developed location can help carve out a niche market. For example, a convenience store or gas station on a quiet highway may not have the constant hustle of an urban counterpart, but it also doesn’t face the same level of competition. With fewer alternatives, customers are more likely to remain loyal and return frequently.
4. Steady and Reliable Foot Traffic
It might seem counterintuitive, but not all businesses need the constant foot traffic that comes with a city location. For specific types of enterprises, like gas stations or roadside diners, steady traffic in a more secluded area can be more valuable than sporadic crowds in an urban center. These businesses cater to a consistent flow of travelers, workers, or residents who pass by regularly and rely on their services.
Moreover, properties located on major thoroughfares or near tourist attractions often enjoy peak traffic at certain times, resulting in reliable revenue. The key is choosing a location that aligns with the type of business you’re operating.
5. Growth Potential and Future Development
While cities are often already developed, rural and suburban areas may have significant growth potential. As urban sprawl extends, what may be considered a remote location today could become a sought-after spot in the future. Investing in commercial real estate in these regions allows for potential appreciation as the area develops.
For example, as more people seek affordable living outside urban centers, areas near highways, small towns, and developing communities can experience population growth and increased business opportunities. A strategically placed investment property in such a location can yield higher returns over time.
6. Less Congestion and Easier Operations
Operating a business in a bustling city comes with its own set of challenges: traffic congestion, limited parking, and a higher level of noise and pollution. These factors can deter customers who prefer a quieter, more relaxed environment. A business in a less congested area can offer a more pleasant experience for customers and a smoother operational flow for employees.
For businesses such as medical clinics, professional services, or even co-working spaces, a suburban or rural location can provide the perfect balance between accessibility and tranquility. This not only improves customer satisfaction but can also attract employees who seek a less stressful commute and work environment.
7. Cost-Effective Marketing and Brand Presence
Businesses in urban centers often need to spend significantly on marketing just to stand out amid heavy competition. Conversely, in less saturated markets, a business can establish itself as a local go-to spot with minimal marketing investment. For instance, a gas station or general store that’s the only option for miles naturally gains recognition and word-of-mouth marketing.
Moreover, businesses in these locations can adopt creative, community-based marketing strategies that resonate with local residents and travelers alike. This helps build a loyal customer base without the massive advertising spend often necessary in cities.
Why Urban Locations Aren’t Always the Best?
It’s easy to assume that a city location is always better because of the sheer number of people nearby. However, this assumption doesn’t always hold true. Real estate prices in urban areas are not only higher, but the competition can be cutthroat. Every business wants that coveted spot with high foot traffic, driving up rental and purchase prices and making profitability harder to achieve.
Additionally, the competition in a city location means customers have a plethora of choices. This can dilute the customer base and create challenges for new or smaller businesses trying to break through the noise. Sometimes, investing in or leasing a property in a strategic rural or suburban area can yield higher profits, lower operational costs, and a dedicated customer base.
Conclusion
The importance of location in commercial real estate cannot be overstated, but it’s essential to look beyond the obvious choices. While bustling city centers might seem like the best bet, they come with high costs, intense competition, and unique challenges. On the other hand, rural or suburban locations can offer affordability, less competition, and strategic advantages that lead to long-term success.
When choosing your investment property, consider not just where the crowds are, but where your business can thrive with less competition and more opportunities. Sometimes, the best location is the one that’s quietly tucked away but perfectly placed to meet an unfulfilled need.
At River Brokers, we understand how crucial it is to find the perfect spot for your business to thrive. Rely on us to help you secure your next prime investment. Visit riverbrokers.com to discover our services and see how we can support your commercial real estate ambitions!
