9600 sf strip mall in mississippi in a fast growing county on 1 acre lot built in1960s and totally remodeled in 2000
corner location on 4 way stop
three local tenants with leases to expire in 3/07, 5/08, 11/08.
gross income 115K
vacancy 4K
maint 2K
taxes 7K
ins 4K
other 6K
what would you pay??
First I would like to look at the comps, traffic count, types and total duration of lesee holders (how many years at this location), structure, condition of the parking lot, roof, HVAC/mechanical systems etc. If satisfactory I would offer 1 Mil and not go above 1.1Mil. Good Luck
Am curious as to what you did...care to share?
JK
before i could put in an offer, someone else has it under contract with other properties the seller listed. i will put in a backup offer...
just 3 units,might be a concern to me !!!!!!! try to push leases out before you buy, ( 10 years) and see what the landlord and tenants say?????????????? sounds good. start at 400.000 to open. good luck!!!!!
AT 400k this would be about 22 cap. At 1million your looking at a 9cap. My best guess is the area is selling at an 11 or 10 cap. Best offer would be 800k - 900k with a Minimum of 3-4 year leases. The problem I see and why I would pass is because with only 3 tenants you would be 33.6 vacant if you lost one. Ouch! But I'm not knocking it. If the three tenant are A credit then we are good to go.
[ Edited by scr2001 on Date 11/15/2006 ]
Always consider how long the leases were and looks like 2 expire around the same time. Would they renew or how easy would it be to re-lease them?
Always consider how long the leases were and looks like 2 expire around the same time. Would they renew or how easy would it be to re-lease them?
what's the cap rate? I would really want to have the tenants either pick up their options, or have them renew before I bought it. I am not familiar to what retail pad go for in Mississippi, so you would have to let me know what the comps are. good luck