Maybe I'm not familiar with the terminology, but doesn't that just mean essentially a "drive-by"? You would do that initially, I imagine and you would check out the tenants, or like you said, if it's vacant, that it looks like its still being kept up, the utilities look like they are on, landscaping is still maintained, etc. That's the extent of the value of a windshield inspection. Once you are in due diligence, you get a real survey to perform a survey, an environmental engineer to do a phase I, a real building inspector, etc.
After doing further research. What it is is starting at the location and working in concentric circles outwards. Listing off the other commercial properties ( tenants vacancy) etc.
What I did was use google maps and excel to generate a list going out 2 miles. Of every commercial property, tenants and vacancies.
What is your goal?
My end goal: To figure out if I should buy a particular strip center.
Step to get there is finding best use/ new tenants, before buy.
Here are some Details about property
Sale price $1 mil. Marketing pro forma Cap 11.7% ( Calculation and research supports it, but only if occupied. Being sold as vacant essentially)
Location tier 2 Rowlett( Dalrock sub market) suburb of Dallas,
TX. Densely populated neighborhood. Mostly SFH. Avg Income 96k (take with a grain of salt because near a lake. Lots of above avg in the data pool).
Strip center is 7,200 sqft office/ medical/ retail.
Currently occupied. Seller who owns and occupies wants to reduce size of his operation to 1800sft. I think he is retiring or relocating else where.
@Bueal George - I know this property in Rowlett. Rentals are very strong on Hwy 66 due to high traffic counts and proximity to Rockwall & George Bush Hwy. Rents are $20-$28/sqft NNN on Hwy 66.
Things to consider -
1) Traffic counts ~23vpd, demographies and median income in 1-2 mile radius.
2) Dalrock Rd does not have much retail/office in this area (except near I30). Neighborhood stores like pizza store, convenience stores etc may work. Dry cleaner would be a good fit but there is one next door :(
3) Most likely you will have to renovate/re-model to suit multiple tenants.
PM me and we can further discuss.
Contact the Rowlett EDC. They will have full demographics info and other insight. Also talk to P&Z to see what’s planned for the area.
A friend of mine is working on redeveloping a property near Dalrock and 66. Let me know if you want his contact info.
@Bueal George There was a recent podcast (November - December 2017?) with someone doing this kind of investing. One of his key points was that you need tenants who are Amazon-proof, which if I recall correctly, included service-type tenants.
Having been a tenant, I'd also recommend that you review the financials of any tenants. You need tenants who are profitable - not hanging on by a thread.
The retail strip where I was a tenant had a Dress Barn and another clothing store (can't remember the name) move out. The spaces were probably 30,000 sq ft each - and they stayed vacant for years. Smaller spaces where a Radio Shack and Metro PCS stores closed were vacant for most of a year each.
I think it's important to have a larger number of smaller renters, vs a more big renters in order to mitigate the risk of too many eggs in one basket.
@Charlie MacPherson I did listen to that podcast. It was very educating. My plan would be to avoid the “retail stores”. Stick to donut shops, realestate agents, fitness center,pizza chains. That sort of business. “Amazon proof it” as you say.
Thank you for your input, it is very helpful.
@Jon Klaus thank you for your input. I will pm you. That would be a very helpful part of my Due diligence.
Have a blessed 2018 this year!
Bueal - You may consider a Void Analysis. It identifies the tenants that are within a certain radius of the location of the property you are trying to buy. It also identifies those that are not within the radius so you can target them first. Similar to your concentric circle idea. You mention pizza - this analysis would tell you how many national pizza locations are in the area and which ones are not. Then you can target the ones that are not.
They are simple to run if you have access to something like Sites USA or similar software.