Example of properties I do not like for RETAIL

[Joel Owens]

Here is an example of stuff I see that I think is ridiculous. The property is single 4,000 sq ft building trading at over 700 a sq ft! If this tenant goes dark no way you are getting 700 a sq ft with second generational tenant. Even if you put 25% down to purchase likely the rent per sq ft with the second generational tenant is so much lower that you are still upside down on the property. People buy this stuff but it just isn't for me. Annual increase is 1.5% and you do not get it until 5 years at a time. I like strip centers for myself and my clients. 2% ANNUAL increases triple net with CAM re-imbursements and per sq ft is in the 100 to 200 sq ft range and cap rate is much higher with cash on cash. I have breakeven occupancy with multiple mix of national and mom and pop tenants versus if a single NNN building goes dark you are going negative paying the mortgage until you get filled again.

Price $2,895,238

Down Payment $2,895,238 (100%)

Net Operating Income $152,000

Rentable Square Feet 4,000

Price/Square Foot $723.81

CAP Rate 5.25%

Lot Size 1.37 Acres

Year Built 2014

Lease Type Triple Net (NNN)

Lease Term 15 Years

Lease Expiration Date 8/15/2029

Increases 7.5% Increases Every Five Years

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