First Net Leased Development

[Joseph Durkin]

Hello,

I have found a piece of land that would be perfect for a standalone drugstore.  The price is $1.3 mm and sits on over 1.75 acres of land.  I have the money to finance the deal through an investor but he does not have any experience in this kind of deal.  How do I determine how much a STNL drugstore will cost to build from the ground up?  Does anyone have an Excel sheet of sorts for this kind of development project you think might be helpful?

Thanks in advance!

Joe

[Joel Owens]

At that kind of money most developers tie up the land for 6 months under contract and shop the site. Drug stores or large gas stations generally pay the most money. They typically only like corners and certain traffic counts per day. If site is not optimal then looking at say a Bojangles that won't pay close to the rent of a pharmacy. Buildings for pharmacy are usually 10,000 to 15,000 sq ft in size and rent for new buildings about 20 to 27 a foot. Old buildings decades old I have seen down to 11 or so a foot in smaller markets. Cost to build depends on the area but could be 125 a foot.

At 1,300,000 would not try to buy the land and then find the tenant. If you do not get the rents you want or the tenant you could lose money.

No legal advice given.