What's your favorite way to evaluate a commercial property?

[Seldon Rios]

Hello BP family!

I am attempting to purchase a commercial property with a shutdown fast food restaurant on it and would like to get everyone's input on the best way to evaluate this property.

I appreciate any feedback! Thank you!

[Tanh Truong]

Vacant restaurants are definitely challenging. What I've done is negotiating with the sellers to have marketing authority under due-diligence to help with procuring a tenant. If you get no interest, both you and the seller are in the same position as before. 

To answer your question, to me simple is better and I'm assuming you mean evaluating the property as in pro-forma for ROI. If so, then I usually only look at COC returns based off of as-is operations and pro-forma at conservative optimization. In your example, you would have to look at what market rates are for a restaurant to rent and factor in TI (tenant improvement costs) for the space.