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Commercial Real Estate Investing
Account Closed
  • Appraiser
  • Los Angeles, CA
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​Commercial Appraisal: Capitalization Rate & Rents Riverside Ind.

Account Closed
  • Appraiser
  • Los Angeles, CA
Posted Aug 26 2015, 18:21

Commercial Appraisal: Capitalization Rate Sale and Rent Study + Opinion Survey for Riverside County Industrial, Corona & Surrounding Areas

As a service to you, I’ve included a recent: Riverside County, Corona & Surrounding Areas Industrial Market Level Rent Study. Real time information that is market participants derived, verified and compiled. The most up-to-date, detailed rent comparables and Capitalization Rate of Return Sales or Investor Required Rate of Return to help either a Tenant or Landlord, Investor, Seller or Buyer solidly understand: current state of the market conditions, trends & leasing activity. This extremely difficult and time-consuming findings process is based upon numerous, confirmation discussions directly with primary parties to each individual, successfully closed transaction. The methodology absolutely yields the most recently transacted and accurate type of highly reliable & well supported data.

To ensure even more solid reinforcement, several comments and opinions from local leasing and sale experts in the specific subject property immediate area are obtained to explain market micro and macro dynamics and nuances. This combination enables clients to have an even higher level of confidence to better make educated decisions, resulting in the best & most profitable investment decisions from initial and unknown possible option scenarios that are at first wide open and unclear.

RIVERSIDE COUNTY, CORONA AND IMMEDIATE AREA FAIR MARKET RENT & FAIR MARKET VALUE - REAL ESTATE VALUATION STUDY & APPRAISAL ADVISORY PROJECT:

• General Real Property Use(s): Industrial
• Specific Use(s): Warehouse, Distribution, Manufacturing
• Location(s): Riverside, Mira Loma, Ontario, Fontana
• Base Rent Range: Up to Low to Mid $.50 per month + NNN's or CAM's
• Landlord Provided Concessions or Discount Incentives to Tenants:
o Free Rent Range: Up to 6 months base rent discount or abatement
o Tenant Improvement Range: Up to Mid to High $1.00 / sf Landlord contribution towards improvement work build out
• Additional NNN or CAM Operating Expense Pass Throughs: Up to Mid $.10 / sf /month that Tenant also pays to Landlord as reimbursement payment for proportionate or pro rata share of Common Area Maintenance Expenses or CAM's for Property Taxes, Insurance, etc. Can also include extra expense pay back of lighting, landscaping, security, etc.
• Lease Up Absorption or On the Market Period(s): Up to 8 months for a tenant to lease a space or building

• Opinion Survey Estimate of the Subject Property's Market Level Modified Gross or NNN Rent Leased to a Tenant: Up to Mid $.60 / sf / month

• Capitalization Rate of Return Sale Range: As Low as Mid to High 4%.

• Opinion Survey Estimate of the Subject Property's Capitalization Rate Investor Required Rate of Return: Up to 6%

• Sell Out Absorption or On the Market Sale Period(s): Up to 7 months for a buyer to purchase a property
• Opinion Survey Estimate of the Subject Property's Market Level Sale Price to an Owner User Buyer: Up Low to Mid $100 / sf

* Conclusion: Total $ / sf Rent Range - Including Base Rent + Additional NNN Expenses: Up to $.63 / sf / month. A moderate to high 17% difference end of the day Total Rent that is paid, not yet taking into consideration yearly rate increases that are fixed, stepped or inflation based upon the CPI or Consumer Price Index.

Surprisingly, huge net effective rent discrepancies exist over a lease term. Even though a majority of the completed rent comparable transactions are in close proximity from the subject property, properties next door or even across the street are unique and not similar or alike.

Dissimilar physical characteristics vastly exist, due to general and specific location(s), specific use(s), year built, quality and condition of improvements build out. These are just some of the major important items that substantially affect rent obtained or paid. The length of the leases were 60 to 72 months.

Depending on which polar end of the spectrum you are and your strategic goals, a Landlord seeks to obtain maximum rent, conversely, a Tenant strives to achieve maximum cost containment. A large amount of money can unnecessarily be lost or saved over a fairly short time period of year over year.

If interested, I’m more than happy to discuss the other facets of this study and opinion survey in more detail.