Value-Add Industrial Rehab Numbers

Value-Add Industrial Rehab Numbers

Investor · Chicago, IL · Member since 2020 · 50 posts · 32 votes

We are looking at a value-add acquisition of a 33K sf warehouse asset that is currently owned by a user who is consolidating operations at another location and vacating at closing.  We would be dividing down to 4 smaller units, all separately metered and demising walls in place, and then renting them out individually.  The play in our market is to rehab what is considered a vacant building to obtain a pretty lucrative real estate tax incentive that makes the fully stabilized building much more attractive to an investor.  So we are developing a pro forma model for a redevelopment type scenario where are bunch of capex goes in up front to get the units back to market.  We have not supervised this level of rehab before.  A few items that I was wondering whether anyone has had any direct experience with on the construction side (understanding some of these things are very market-specific):

- Asphalt parking lot replacement - looking at about $5.00/sf for this

- Concrete aprons around the docks - there are 4 front dock doors, and some of the aprons needs some patching/replacement.  I don't think they all need to be replaced, but what would be a good psf number for replacement so we can ballpark it?  We've got about 20K all in set aside right now. 12.5 foot clear ceilings btw.   

- Fire sprinklers - looking at about $5.00/sf for this.  Quotes seem be anywhere in the $2.00 to $7.00/sf range.

Also, somewhat related, what do people think is the best source for what would be a construction/mini perm type of loan product, where there would be an interest only (6-18 months or so) component then a 3-4 year maturity after conversion/stabilization.  We have some relationships with the local/regional banks that do these types of loans.  A couple credit union prospects as well. But wondering if there are other non-traditional debt providers out there that concentrate in this space that I'm not thinking of.

Any thoughts would be appreciated.  Thanks in advance!

0Reply
14 views

No replies yet. Be the first to reply to this discussion.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.