Feedback on NN opportunity in Port Charlotte FL

[Dan Cahill]

Hi, 

Looking for some feedback on this property for sale in Port Charlotte, FL: https://www.crexi.com/properti...

Cons

- 7 year lease remaining

- NN only

- 4.75% cap rate

- Last sold for $475K in 2018, now asking $800K.  Looks like roof was replaced prior to new owner taking possession in 2018.  Only permits pulled since were for plumbing (replace water lines) and garage door.  Thus, 3.5 years less of a lease term, and seller looking for $325K gain.  I don't want to be left holding the bag if we go into a recession.

Pros

- Strong tenant w/corp. backing from Sherwin Williams

- Location - this is the draw to me.  Port Charlotte has had double digit population growth for all of the US census counts, and seems to be a community that is well-liked by the local population.  Property located just off the main Rt. 41 that runs through town.  

- Roof and HVAC, etc. upgraded in 2018

- Building relatively easy to re-purpose since appears to just be a rectangle box

[James Storey]

At first I thought it was priced aggressively at a 4.25% CAP but looking at the rental rate, I think there could be some upside potential from rent even if Sherwin Williams left the space. Looks like Sherwin Williams is paying right under $9sf NNN which is pretty low but you would have to wait 6 years to get any chance of a rental increase. If there is already renewal clauses in the lease at give rates then the value add aspect is out of the window unless you held it long term.

Repositioning would be rather simple in my opinion. The open box could be anything but may need some TI to make it right for the right tenant.

James Storey, CCIM