6 cap for commercial stabalized property
Hi there! I have been offered a deal at a 6 cap - $52,000 NNN rent (tenant pays property tax, insurance, utilities, maintenance). This is for a stabilized treatment center in the Northeast. What is the best way to underwire this considering current market conditions, possible imminent recession? I'm looking to buy this in cash.
Need to make a decision in 24 hours so this is time sensitive- any advise or PM is greatly appreciated.
Most Popular Reply
I would compare it to other NNN deals, the credit of the tenants and the terms of the leases. Also keep in mind that the Fed has raised rates by .75 bp and it looks like there maybe 100 bp more. So I would be carful of a 6 cap, as with the movement of rates a Market cap is a moving target. on the other hand if your happy with a 6 cap and have a long time horizon, go with it. Just know the market may move