Who owns a neighborhood office building?

Who owns a neighborhood office building?

Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 796 votes

I want to hear from those who have a neighborhood office building.  This could be a building with retail on the bottom and office on the top.  It could also be just entirely office.  Tell us about your list of tenants.  An example would be an office building that has 4-20 units.  These units could be leased out to a dentist, lawyer, doctor, association, title company etc.  Generally speaking these buildings can be 1-3 stories high with square footage between 1-3K for each unit.  Let's do a deal deep dive and learn about this asset class that no one talks about.  

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Ronald RohdePro Member
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
3y

My parents used to own exactly that. 5 story suburban deal. 1k is maybe too small, but I think its a scary asset right now.

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    3y

    My parents used to own exactly that. 5 story suburban deal. 1k is maybe too small, but I think its a scary asset right now.

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    3y

    I actually just had one of these deals sent to me this past week. 4 units, each unit is only about 800 SF. 1 occupied, the other 3 are vacant.

    They are asking $850k. Rental comps are about $22/PSF modified gross.

    It's not a horrible deal but I'm spread too thin to take it on right now, especially with the vacancies.

    The small unit size is attractive in my opinion. Easier to fill.

  • Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 796 votes
    3y

    My neighbor actually buys these buildings about 1/2 to 3/4 full and then leases them up at almost 100%.  Not sure what the thirst is for these as a flip, but if your willing to do a little work on the leasing side it could give you some nice cash flow.  My neighbor says the tenants are sticky and generally aren't swayed by the economy.  The advantage of neighborhood office is the size, affordability, and location.  The central business districts are the ones with large office buildings in downtown with little or no residential around it to support it.....These are the asset classes that are hurting right now.

  • Member since 2022 · 17 posts · 4 votes
    3y

    I have a office building under contract now. it's currently 100% occupied with a waiting list. 

  • Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 796 votes
    3y
    Quote from @Rinku Patel:

    I have a office building under contract now. it's currently 100% occupied with a waiting list. 

    So tell us about the office building.  Size, type of tenants, cap rate, why you did the deal, etc.
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