I find it amazing that there are so many people willing to help others is such a selfless fashion. This forum is a prime example.
I am looking at retail properties these days. I have been learning but am still a rookie. I reached out to Joel with some questions and property information and this was the response that I received:
We go 7% to 8% vacancy. 5% selling brokers like to use but it is optimistic.
Why out of two vacant units is one at 22 sq ft estimate for lease up and the other at 12??
You have 9,642 sq ft total / 1,200,000 = 124.46 a sq ft for a half vacant retail building. That is high for partially vacant like that.
Usually income is listed as base rent per sq ft and then CAM re-imbursement. One lease gross and one lease NNN isn't optimal.
I would have to underwrite this property to really give an opinion on it. How much land is this sitting on?? Maybe a redevelopment play down the road for a higher and better density or use.
If area rents are 15 and the two tenants are on vintage leases then the 19 and 22 sq ft mean nothing. Those tenants will ask for a reduction or leave to a better location at the higher sq ft rate.
You are estimating TI at 9 a sq ft for the two vacant spaces. That is very low. National tenants expect TI's in the 20's to 30's. Mom and pop still 9 is very low.
I asked some followup questions and received more information from him.... all over the weekend. The information provided was very helpful to me. He gets nothing out of this.
Thanks Joel! You are an incredible person.
For some reason the @Joel Owens did not work in the last post.
Well Said. Joel is one of my favorite people on this site!
Glad to help Steve. Thanks for the kind words.
Once you dig into the leases you might uncover more issues.
Depending on age of the center find out if a dry cleaners ever existed on the site. The older dry cleaners even if gone from the center are known for environmental issues. The new dry cleaners use a different non-toxic green process.
Open this link and do a find for "dry cleaner" and you will see what @Joel Owens is talking about.