All Forum Posts by: Phil Christian

Call and speak to the most active local commercial real estate brokers in your desired market. Tell them your requirement and ask to be put on their distribution list. 

@Charles Kennedy Best approach. 

But, this sounds very messy already... 

Perhaps simply propose a ground lease. 

We solve to a ~1.5x equity multiple to the investor which is typically 18-26% IRR on a 2 year hold. Cumulative pref of 6-8% depending on the equity profile.

Tustin, CA is in Orange County (for those who don't know).  There are hundreds of commercial brokers in Orange County & LA County (they often bleed together).

As Joel mentioned, you need to share what asset type you want to focus on before a recommendation can be made. 

There are a few walk arounds.... 

You can be put on the closing statement and paid out of escrow when the deal closes as part of the deal costs.  It will depend on the partnership with the operator or sponsor you are raising money for.  Call it a consulting fee. 

6" insulation blanket above the ceiling grid between the offices.  This is common practice in office TI's. Check with the Landlord for the exact product they would prefer to use. 

My partners and I are. All of our deals have been brought to us through brokerage relationships. We have bought 16 in the last 18 months. 

 Agreed

Principal Reduction & Depreciation is way down on the line when underwriting these deals... like almost the tail waging the dog or never get's look (unless its a long term hold play) but still, down the line.   

A better way to look at it: 

Acquisition price: $15,000,000

TI's: $500,000 ($100 PSF)

Ancillary Costs: $450,000

Acquisition Fee: $150,000

Project Basis: $16,100,000

Gross Rent: $1,500,000

Yield on Cost: 6.99%

Loan Amount: $12,857,142 (60% of Reversion Value) 

Reversion Value: $21,428,571 (@ 5.25% CAP... just guessing this market cap rate)

Equity Needed: $3,42,857

Pref Return: 10% 

2 Year Hold: $648,571

Net Profits and Pref & Equity: $4,037,142

Investor Split: $2,422,285

Sponsor Promote @ 40% Split: $1,614,857

Total to Sponsor (THOR): $1,784,857

 Obviously I don't know all of the deal deals but this is how an institutional investor would underwrite (back of the napkin). 

Best, 

The closest thing to a commercial mls is Costar & Loopnet.  This being said, there isn't a need for larger transactions to be placed on these sites because there is no reason to alert the world to a project for sale. 

The larger the deal size the smaller the buyer pool becomes. Even in SoCal there are typical only a small handful of buyer profiles for specific deals. Secondary or tertiary markets might only have a buyer profile of 2-3 groups that have the capability/experience/relationships/capital/free-time to purchase a deal. 

Furthermore, brokers who focus on large transactions do not want to waste their time fielding phone calls from random people who are not capable. It's a time suck. 

"They don't necessarily set out to flip, but they take advantage of a rise in market price when they can." ....... 

Yes they do... except its not called flipping (well it could, but not in the specific house terminology).  It all depends on the business plan for that particular asset.  Business plan can depend on a multitude of different factors; equity, debt, sponsor profile, company strategy, type of real estate, market conditions, tenant profile, etc....  It's an exit plan. 1 year exit, 2 year exit, 3 year exit, etc.... or long term cash flow. 

Oftentimes, new players into a particular market will either have to parachute into a sub-market/brokerage community and aggressively buy a deal to get everyone's attention OR organically take the time to insert themselves into the community and develop relationships.