Commercial RE term help

Commercial RE term help

Real Estate Agent · Snohomish, WA · Member since 2020 · 99 posts · 49 votes

Hi all,

I’m looking over some data on a potential commercial acquisition. 

First, what are some key points I should looking for? 

Second, what does Lease Rate $19.00 Ann. Mean?

Thanks In Advance 

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Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
3y

@Kobe McDaniel, your first question is probably far too broad to get any meaningful answers.

Commercial can be office, industrial, retail, mixed use, etc.  But you need to know the market, the demand drivers, the cap rates, the location (what makes a good retail center doesn't necessarily make a good office).  You should be looking at parking ratio, tenant mix, age, capex, lease rates and terms, NNNs, easements, environmental issues, noise restrictions, ADA compliance, sprinklers, fire risers, management, leasing, security, landscaping, estoppel issues, aging and delinquency reports, zoning, structural issues, construction style, signage, does leased square footage run from exposed side of drywall or center of all, where does tenant responsibility stop and LL responsibility start for things like plumbing, utility metering and bill back, service contracts.

I am guessing your second question means the lease rate is $19/psf/yr

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  • Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    3y

    @Kobe McDaniel, your first question is probably far too broad to get any meaningful answers.

    Commercial can be office, industrial, retail, mixed use, etc.  But you need to know the market, the demand drivers, the cap rates, the location (what makes a good retail center doesn't necessarily make a good office).  You should be looking at parking ratio, tenant mix, age, capex, lease rates and terms, NNNs, easements, environmental issues, noise restrictions, ADA compliance, sprinklers, fire risers, management, leasing, security, landscaping, estoppel issues, aging and delinquency reports, zoning, structural issues, construction style, signage, does leased square footage run from exposed side of drywall or center of all, where does tenant responsibility stop and LL responsibility start for things like plumbing, utility metering and bill back, service contracts.

    I am guessing your second question means the lease rate is $19/psf/yr

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

    You want to know T12 financials, copy of existing lease, ALTA survey, order Phase I, PCA, title review.

  • Developer · Boulder, CO · Member since 2018 · 530 posts · 365 votes
    3y

    @Kobe McDaniel Kobe, based on your post, it appears that you need to become financially literate and learn how to conduct pro forma analysis before you seriously consider getting into a commercial deal.

    Feel free to let me know if I can help you with your investment goals.

  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3y

    As noted above.  Learning curve.


    Recommend you do 5 deal analysis for this type of Commercial asset and let others pose questions or recommendations.   Before making an offer.  For now pass.  

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