Evaluating Commercial for Mixed-Use Deal

[Michael Leeson]

I'm considering a mixed use property - commercial on ground floor and residential/STR second floor.

Can anyone recommend a great tool or approach for evaluating commercial leasing and vacancy rates?

Any advice is much appreciated!

[Charles Carillo]

@Michael Leeson

We own mixed-use properties where the majority of the square footage is residential and only about 5%-10% is commercial storefront office. We would run the numbers like a normal apartment building for the residential and then the commercial portion really depends on the demand for the unit. Is it prime, what are the current vacancy rates in the area? Is it rented now? Some storefronts are so unique that they cannot be really compared. In our situation we just took a low estimate of rent and calculated that it would be vacant 1/4 of year since we were not sure how long it would take to rent and how long they would stay. I would speak to brokers in your area about commercial leasing if the commercial space was a much larger portion.