Detecting Investment Opportunities in a Neighborhood

By Richard Gallegos

When researching a new business opportunity, most developers and investors look for a demographic that fits a specific criteria, a resource base to fulfill projections and the potential for local funding to finance a project.

Yet no two business possibilities are the same. Knowing what attracts developers and investors can help some locales find potential that might not be evident at first glance. Investors are drawn to cities that offer them the best combination of scale, risk and return. Generally, a sizable population base with sufficient demographics to support the development is what influences investors.

A tale of two cities

Greenville, S.C. and Albuquerque, N.M. might be more alike than different given their appeal to investors and developers.

Although it only has a population of 100,000, Greenville boasts the highest level of foreign capital investment per capita in the nation, and is home to more than 250 international firms from 26 nations, according to White. This lends credence to the fact that even a small demographic base can still be used to further investment if the right mix of resources and funding are available.

Located steps from the Blue Ridge Mountains, Greenville has an influx of manufacturing jobs, a mild temperature and big-city amenities without the issues that can plague larger metropolitan areas, according to a recent U.S. News & World Report Best Places to Live report.

Albuquerque, on the other hand, is home to more than half a million people, where a number of developers have recognized opportunities for successful development here.

The Downtown Albuquerque Silver Street corridor is one of those projects. It recently underwent a ground-up development. The project was a public/private financed endeavor that received municipal occupancy approval. An empty lot was developed to incorporate a mixed-use format.

The ground level has Downtown Albuquerque’s sole full-service grocery store, Silver Street Market, as an anchor tenant. It also boasts the state’s first-ever dual-space brewery and restaurant operated by two distinct companies. Other businesses are in the early stages of review for the site. The upper three levels are reserved for residential apartments, all of which are already leased.

Without these variables it is often difficult, if not impossible, to find funding. Each funding source has company protocol and, if it’s an FDIC institution, federal mandates to follow.

Rarely will a developer move forward on a project where a bank has opted not to risk it. One exception is in the case where an existing business has been funded in an area and is successful. Under such circumstances, a bank may be inclined to fund another business in the same area.

Bio: Richard Gallegos, DREI, CDEI, is the Education Manager for OnCourse Learning Real Estate. He is a commercial real estate broker based in Albuquerque and served as a leasing agent for some of the Silver Street project tenants.

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