Start up a new stripmall project

[Wayne Shi]

Bought one acre of commercial land beside a high school which has about 3000 students and 500 staffs at San Antonio Texas. 

I am planning to build a 10~12K sqft strip with 6 units, which type of business will be well fit?

In one mile radius , the new strip has a $20~25+NNN lease rate right now.

If anybody at here has experiences to develop this type of property from financing, construction and lease marketing?

ANY advices and ideas are appreciated.

[Joel Owens]

What did you pay for the land?

You will need to take legal costs, land entitlement costs, sewer and water tap fees, exterior construction costs, interior TI costs, leasing commissions, and construction loan costs.

You would take out market vacancy for the area for appraisal purposes. Take market rents per sq ft and then get a cap rate to cost.

Honestly you might want to forget the strip center if you can land a national STNL tenant for the site. Get a long term NNN lease at the same cap rate to cost and do nothing to the property but collect a check on a 15 to 20 year lease.

Running strip centers can be work especially with regional to mom and pop tenants.

I was in the food business for over a decade and it sounds fun but believe me that kind of yogurt type business is a lot of work. Your wife needs to work some at a place like that to see how reality matches up with her dreams of owning a food business. You also do not make much money with those.

52 parking space is about a 5.2 parking ratio per 1,000 sq ft buildable. You need to check if that is allowed by your county or city where the land is located. They might require more parking even if you can build such a site. The tenants also might demand more parking then you are wanting to do. The city or county could also want more green space or a tenant wants a drive thru facing a certain direction for stacking cars. All kinds of things. It's a dance between what you the developer wants, the tenant wants, and the local government and community wants. You have to find the happy medium and see if it still makes sense to build.

Sometimes you just sell the land to an end user for a mark up and move onto the next one.