Travel down Airline Highway heading toward Prairieville, and a sea of strip centers come into view. On a Monday around lunchtime, good luck finding a parking spot.
The lunch crowd is particularly voluminous on weekdays, but restaurants and grocery stores aren’t the only things drawing people to the shopping centers as retailers and gyms have opened more and more locations.
This particular stretch of Airline Highway isn’t the only slice of Greater Baton Rouge with a tightly packed presence of strip centers.
Though considered a more mundane type of retail, as shoppers have soured on the mall experience, many stock market investors—including some locally—are instead turning their attention to strip centers and grocery-store-anchored shopping centers.
Share prices of strip-center real estate investment trusts (REITs) gained 8.6% in the past 12 months, according to national data from FactSet. It trails the S&P 500 stock index’s 29.2% return over that period, but performed significantly better than the 19.3% decline in the share price of mall landlords.
Strip centers have a number of advantages over other retail. Online purchases of groceries have taken in only a limited number of cities, making the centers more internet-resistant and likely more resilient during a recession. They’re usually smaller than malls and, depending on their location, could appeal to a wider selection of tenants looking for tighter spaces and more visibility on major roads.
Judging by the quantity of shopping centers in the Baton Rouge area that are newly built, under construction or being planned for development, the local real estate community is also banking on this type of retail, though strip centers aren’t completely safe from market whims. Read the full story from the latest edition of Business Report.
