Bought a 10,000 SF Warehouse, but is this even possible??

[Edward Salazar]

Hi everyone, I just bought a 10,000 sf Warehouse building from a distressed owner and would like to try something out. I did some renovations to it and brought some highly qualified new tenants that pay a lot more than the previous ones. The current tenants pays 6.5 per sq ft/year, whereas the previous paid 4.5 per year.

My questions are:

At the time of me purchasing it, The appraiser gave me an appraised value similar to what i paid for at closing. Would the appraised value increase because of the higher rental returns?

If I want to sell the property fully rented today, would i assess the value and sales price based on the current rentals and cap rate or the "not so many" comparables in the area? What would be an enticing cap rate for an investor? Is there a strong demand for this type of investment? 

 I Appreciate any advice or feedback on this matter.

@Roy N. @Arianne L. @John Thedford @Sam Ally @Chris Martin

[John Thedford]

Good deal Ed. Commercial properties are valued by the income approach. If you increase NOI you are increasing market value. You can do that simultaneously by increasing rents and decreasing expenses.