Potential Investment - Medical Office Building on LoopNet

[Rakesh Battula]

Hey everyone,

I'm looking for some insights from the community on a potential commercial property investment I found on LoopNet. It's a medical office building located in Prosper, TX and here's a breakdown of the key details:

Property Details:

• Sale Type: Investment or Owner User
• Property Type: Office
• Property Subtype: Medical
• Building Size: 9,657 SF
• Building Class: B
• Year Built: 2023
• Percent Leased: 100% (Currently Fully Occupied)
• Tenancy: Multiple Tenants
• Building Height: 1 Story
• Land Acres: 1.00 AC
• Zoning: Commercial

Financials:

• Purchase Price: $676,000 + $81,000 Tenant Improvement (TI)
• Down Payment: 20%
• Commission: $22,000 (agent commission)
• Monthly Rent: $5,400 + NNN (exact expenses not specified)
• Vacancy (First 6 Months): Estimated expense of $27,600 (assuming rent starts after 6 months)
• Mortgage Payment Options:
  • 25 year term - $4,000/month
  • 15 year term - $4,600/month

Looking for Your Expertise:

• Does this fully leased medical office building present a good potential investment opportunity?
• Considering the new construction (2023) and current occupancy, is the purchase price reasonable?
• Are the lease terms favorable, particularly with the 10-year initial lease and renewal options?
• Are there any red flags I should be aware of, such as the vacancy expense or NNN costs?
• What additional information would be helpful to get a better understanding of this deal (e.g., demographics, tenant mix, operating expenses breakdown)?

I've been following the forum for a while and value the insights you all share. Any feedback or thoughts you have on this potential investment would be greatly appreciated!

Thanks,

Rakesh Battula.