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Updated over 2 years ago on . Most recent reply

User Stats

16
Posts
21
Votes
Uzma Abdullah
  • Rental Property Investor
  • Irvine, CA
21
Votes |
16
Posts

6 cap for commercial stabalized property

Uzma Abdullah
  • Rental Property Investor
  • Irvine, CA
Posted

Hi there! I have been offered a deal at a 6 cap - $52,000 NNN rent (tenant pays property tax, insurance, utilities, maintenance). This is for a stabilized treatment center in the Northeast. What is the best way to underwire this considering current market conditions, possible imminent recession? I'm looking to buy this in cash.

Need to make a decision in 24 hours so this is time sensitive- any advise or PM is greatly appreciated. 

Most Popular Reply

User Stats

249
Posts
133
Votes
H. Jack Miller
  • Lender
  • Boca Raton, FL
133
Votes |
249
Posts
H. Jack Miller
  • Lender
  • Boca Raton, FL
Replied

I would compare it to other NNN deals, the credit of the tenants and the terms of the leases. Also keep in mind that the Fed has raised rates by .75 bp and it looks like there maybe 100 bp more. So I would be carful of a 6 cap, as with the movement of rates a Market cap is a moving target. on the other hand if your happy with a 6 cap and have a long time horizon, go with it. Just know the market may move

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