Retail property performance: An examination into the influence of size, age, and renovation on internal rates of return

The ever-changing demands of the consumer make the need for optimum property performance a necessity in the real estate market. What factors influence property performance? Several characteristics influence retail property performance. The purpose of this study is to examine the influence of size, age, and renovation on retail property in the state of Texas during the past five years. The data were collected from a database obtained from a worldwide institutional lending organization. The study randomly selected 115 retail properties for analysis by hypothesis testing. The property data were gathered from operating statements and placed in a spreadsheet for examination and analysis. The findings of the research show that larger retail properties do not produce higher internal rates of return than smaller retail properties. Further analysis led to the finding that older retail properties produce higher internal rates of return than younger retail properties. Finally, this study found that properties that have been renovated produce a higher internal rate of return than properties that have not been renovated.