Cap rate for retail condo

3 Replies

@Arif Uddin  The question is broad. Do you have an address, neighborhood, the current asking price, the current net income, length of the lease, tenant, etc. All of these go into consideration when looking at a deal. Some deals give you a cap of 5%, some 7%, and more if lucky. But simply making a purchase just based off a cap isnt really the way to go.

You need to look at the ownership mix of the retail condo development. Is it all owners except for the unit you want to buy ,all investor owned, or a balanced mix??

Who is head of the association and what does the books look like?

Benefit of a retail condo can be cheap entry level price. Downside is generally you have little to no control over the development unless controlling declarant.

The cap rate will vary by area, quality of tenant with credit, and a ton of other factors.

If you do not know how to analyze you might want to connect up with a smaller mom and pop type commercial retail broker local to the area. A commercial retail broker that works on larger properties in the millions to tens of millions in price usually do not have time to work with buyers on smaller retail condo type projects.

ICSC has a book library you can research to see if there is material there you want to purchase and read for retail condo's.