Calling All Neighborhood Non-Anchor Retail Pros!

[Kim Hopkins]

Hello! 

We are experts in multi tenant industrial but we're looking at some neighborhood non-anchor retail centers to purchase. Would love some help from the pros here on assumptions to make for high level underwriting (in order to decide if we want to make an offer and at what price). 

Here are the facts: 
• 20,500 SF
• Small tenants ranging from 800 - 2,400 SF.
• ~$5.5M purchase price. 6.75% cap rate.
• All tenants are NNN. 
• 2023 OpEx stated at $4.50 PSF or 22% of base rent income.

Here are my questions: 
1. How long does it take typically to relet a space? (For MT Industrial, it's 1-2 months for example). 

2. What is the typical TI ($/SF/Yr or other formula) for new tenants on rollover? And who typically pays it or how is it structured? (E.g. LL always pays or tenant pays but is amortized or...)

3. What do you typically reserve ($/SF/Yr or other formula) for other reserves and/or capex? 

4. How much did your commercial property insurance increase (%) this year and are there any strategies to mitigate? 

5. How much do you typically pay for property management (% - please specify if it's on base rent or gross rent including NNN reimbursements)? 

6. Is there anything else we should know or look out for that comes to mind? E.g. always check.... X. 

Thank you!

Kim