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Updated almost 4 years ago on . Most recent reply

User Stats

134
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100
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Will Kenner
  • Rental Property Investor
  • Seattle
100
Votes |
134
Posts

How dirty can laundry be?

Will Kenner
  • Rental Property Investor
  • Seattle
Posted

I'm currently negotiating a PSA for a multi-tenant commercial property and one of the tenants is a coin-op laundromat business. The lease is full NNN, so utilities and maintenance/repairs within the suite are on the tenant. Therefore water/energy efficiency is of the tenant's concern and not mine, in addition to the condition of fixtures within the suite. The building was constructed in the early 2000's so the electrical service, water mains, and sewer lines are all relatively new. During the feasibility period I'm planning on conducting the usual due-diligence with a thorough inspection of all the property's systems and structures (utility services, roof, HVAC, maintenance history, lot survey, tenant interviews) along with a Phase 1 ESA. I'm curious what else should be considered/evaluated during the due-diligence that would be specific to having a laundromat tenant. Dry-cleaners of course can pose a significant contamination issue with a property, but would a regular self-serve laundromat have similar contamination potential? So far on the financing side I've had differing opinions from two banks. One bank says they will classify the property as Special Purpose and require a Phase 2 ESA at a minimum because of the laundromat tenant, even though they only account for about 20-25% of the leased space. The other bank says they will classify it as fully Commercial (which is more ideal) since the laundromat is less than 50% of leased space.

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