Would you do this NNN deal?

[John McKee]

Let's test the waters here. I'm looking at a mom and pop cafe that has a cap rate of 8%. It's a first floor retail condo in a downtown D.C., but in the neighborhood section not the business district where offices are only 60% occupied. Above this retail condo are residents who own their own condos (100 units). Other ground floor retail condos are all occupied such as a salon, Fedex store, vape shop and this cafe that I'm talking about. Across the street is a middle school and has lots of car traffic. It also has lots of foot traffic as well with a walk score of 90. Tenant has been there for 2 years and has 3 years left on the lease. This is a true NNN, and the management is easy since the association takes care of the maintenance and roof. The association dues are a part of the the NNN costs. You're essentially owning a 900 square foot box.

Would you do the deal?  

[Russell Brazil]

If it is an 8% cap rate, Id question why the unit is so cheap. That would be the highest cap rate in DC, making this property unusually cheap...and theres a reason for that even if its not easily evident.