All Forum Posts by: Ronald Rohde

@Chris Seveney - Right now we'd be modeling an exit at year 5. Refinancing might work, but we first model a sale so we aren't specifically dependent on the debt markets. 

@Matthew Drouin - Yes, modeling cap rate decompression. Usually starting at 10 basis points per year, sometimes more if we're buying below market cap and it's a heavier value-add. This is a sale lease back and the length would be 10 years. 

Sorry not red bricks/. i mean concrete blocks.

I have never done commercial construction. I am planning to build the warehouse to use for myself. I have been looking for warehouse but there is not much inventory to choose from. 

I am ok to wait 1-2 yrs if there is a significant saving. But it seems like developing small project is not making sense now in this market condition.

So the Builder takes all the profits ? or the construction cost is too high currently?

The best strategy is to wait for the CRE market fall and buy a existing one ?

Thank you y'all for your valuable opinions.

So its NNN with $745k in rent still remaining and another 170k in taxes and utilities. I assume that is a consideration as well. What discount rate do you typically use for your NPV? Do you just use the current interest rate?

@Ronald Rohde...what specifically do you like about "industrial NNN" ?

Brad,

From an Insurance standpoint, a Office building of the same value (cost to rebuild) and same construction is generally less expensive to insure than an Apartment building.  Also, there are more insurance companies that like the Office Building vs Apartment buildings so the rates should stay stable longer.  

@Ronald Rohde not looking at vacant buildings, I want to know about the area should vacant buildings be a red flag l, or is the area changing.