Should You Invest in a Strip Shopping Center? Here’s the Real Story

So, you're thinking about investing in commercial real estate—and strip shopping centers are on your radar? Great! Let’s talk.

Strip malls (also called neighborhood or community centers) don’t get the flashy headlines like massive shopping malls, but they are everywhere. Seriously—while there are only 685 super-regional malls in the U.S., there are over 66,000 strip shopping centers.

Why? Because they serve the everyday needs of everyday people—within 3 to 5 miles of where they live and work. And for smart investors like you, that presents both opportunity and stability.

Let’s walk through the pros, the cons, and what really matters if you’re considering this asset class.

First, What Is a Strip Shopping Center?

Typically, these are open-air clusters of 3 to 12 retail businesses (sometimes more), all facing the same parking lot. They’re usually L-shaped or straight, with each store having its own entrance. No giant food courts, no escalators—just convenience and accessibility.

Neighborhood centers range from 5,000 to 100,000 sq. ft., while community centers can stretch up to 350,000 sq. ft. Either way, they’re built to serve locals—which makes tenant selection and foot traffic king.

Key Advantages of Investing in Strip Shopping Centers

These properties can be an investor’s dream, especially when well-positioned in the right location. Here’s why:

• Triple Net Leases (NNN): Tenants cover taxes, insurance, and maintenance. That’s a win for your cash flow.

• Percentage Rent Opportunities: If a tenant’s sales exceed a certain amount, you get a bonus on top of the base rent.

• Seller Financing: Many smaller strip malls offer creative financing options.

• Shorter Lease Terms: Easier to raise rents or replace underperforming tenants.

• Practical for Smaller Investors: You don’t need millions to get started here.

• Economic Development Support: Local governments often offer assistance for improvements.

• Less Seasonal Volatility: These aren’t gift-shop destinations—they meet daily needs.

• Strategic Specialization: Centers with health, fitness, daycare, or fast casual dining tend to thrive despite online retail trends.

• Reduced Competition: Big institutional buyers often overlook these deals.

• Potential to Improve Local Area: Upgrading your center can also boost nearby home and apartment values.

What Are the Potential Downsides?

As with any investment, this isn’t all sunshine and passive income. Here’s what you’ll need to navigate:

• Smaller tenants mean less financial backing.

• Higher vacancy visibility—when a unit is empty, it’s noticeable.

• No anchor tenant? Getting financing might be trickier.

• Impact of e-commerce on traditional retailers.

• Cash flow volatility if 1–2 tenants leave.

• Strip centers average 10% vacancy, compared to 8% for larger malls.

But here's the good news: A great property manager and smart due diligence can offset many of these risks. And the payoff? A stable, recession-resilient asset with excellent cash flow potential.

Final Thoughts

If you're the kind of investor who likes to stay grounded—literally and financially—strip shopping centers might be the just right Goldilocks option in your portfolio.

They’re stable. They’re scalable. And they serve a purpose that’s not going away anytime soon.

Want to know how to evaluate a strip center? What to ask during due diligence? I’ve got a system to walk you through it all—step by step.

Let’s do this the smart way.

~ Doc
Your guide to confident commercial real estate investing

P.S. Real Words from a Real Student

“In the Commercial Real Estate Mentorship Program, I found everything I needed to become a commercial real estate investor for the rest of my life! Now I own a small strip center in Arizona, and I am very happy about that. I highly recommend Doc’s program.”
— Conrad C.

Just like Conrad, you can go from curious to confident. When you’re ready to take the next step, Doc’s proven self-study mentorship program is here to guide you through it.