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[Jean Taveras]

Hello BP'ers, Ive developed a strong book of business with clients interested in retail, business, shopping centers and health care facilities. All sorts of commercial investments, cost varies. They have lots of capital etc. Most I find are looking for 7% or higher cap rate. I understand that the commercial industry is very tight with who they share they're deals with and I would like to be included in the circle of first notice basis before investment hits market. Anyone in this forum from south Florida, Texas, Chicago and New York that would like to include me in their exclusive list? Much appreciated, Jean Taveras

[Joel Owens]

I can tell you Boca at a 7 cap is a non-starter. Many investors will buy 1031 exchanges at lower cap rates and use vacations to go there as tax write offs.

Maybe you find it but Florida is very cap rate compressed for quality retail properties versus other states in the cycle.  

Medical office you might hit a 7 cap there. For national tenants in a multi unit strip center in a good area there I haven't seen it. Your investors might have to build and develop to get the cap rate they want.

Example you look around and find sellers all want 5 to 6 caps and your buyers will not pay it for Boca. They want new product at 7 cap but owners say they will refi and hold their new development and keep building more projects. So your buyer can buy land and develop themselves maybe a 9.5 to 10 cap rate to cost all in if they buy the land right. They might not want to do all of that work but what they want in the area they want doesn't exist. So you have to see if what your buyers want is even possible in the area they want.

Owners love 1031 buyers putting 40% or more down because lenders will overlook issues with debt numbers and they can pay low,low cap rate to the owner just to avoid a tax penalty from a failed exchange.

Buyers not 1031 with cash sitting around are more picky and less motivated so I ask owners always what is the cap rate they would sell at so my time is not wasted.