Planning my first commercial development

3 Replies

Hello Everyone

I've been building Papa John's Franchises for the past 5 years and now I have gathered enough capital to develop my first commercial real estate project. I own several residential properties but dealing with lease negotiations with the landlords for my PJs; it is a vastly different game for sure.

I'm planning to syndicate a 1.6 acre commercial retail development in a growing neighborhood - although I'm well versed in residential real estate and other areas of business. I'm a bit green when it comes to developing a project like this.

I was wondering if there are any fellow members here who have experience developing a parcel of land into a retail center that can consult me through the project. Although I'm using my commercial agent that hunts down locations for my Papa John's as a resource; I'd like to get some insight and direction from someone who has expertise in this area.

Any input, resource and comments are greatly appreciated!

Thank You

Eddie

So Eddie you are in Canada??

I wouldn't know the development space in Canada. It's probably much different than in the United States.

That's interesting about the Papa Johns. I used to be in the food business and worked for one of the largest franchisees in the Units States for Dominos.

With the PJ's were you the contractor team constructing the buildings or did you buy the land parcels??

Were you doing ground leases on those, NN, or NNN?? What's your typical spread on those??

The strip centers you are talking about building it depends a lot on the area with entitlements and how long you want to hold before selling etc. The developer might have a cap cost of 10 and be selling for a 7 to 7.5 cap all in.  

Joel,

Yes I'm in Canada - I'm the franchise developer for Northern Alberta. It's great to see someone else with franchise background :)

I set up franchisees with a turn key location, the majority of them are leased units.

Honestly for my first building that i'm in planning stages for right now I'm thinking it's a long term play. Start a syndication with a few investors in mind (depending on the size of the project) if it's smaller I should be able to handle myself. Try and fully lease the building out then refinance to extract funds for a second project. ultimately I'd like to build and hold all properties... but as anything goes a lot can change in between.

Eddie

@EddieTsang This is the first time I've heard much about franchises, and I'm curious how funding works.  Do they provide funding for you to buy the property, or is it a lease?  

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here