40k sqft Industrial Warehouse

[Ken Naim]

Investment Info:

Industrial commercial investment investment.

Purchase price: $1,225,000
Cash invested: $1,000,000

Updated 40k square foot manufacturing or distribution facility on a fully fenced 10.34 acre parcel.​ With major renovations completed in December 2020, this 40k sq.​ ft.​ former aerospace manufacturing facility is perfectly situated in Sebastian, FL.​

What made you interested in investing in this type of deal?

The property was very distressed and the potential for a large gain was there post renovation with a very limited downside risk.

How did you find this deal and how did you negotiate it?

I found it through a commercial real estate agent, it was off market and another investor had just purchased it. It needed a lot of work and he was out of state, so he flipped it to me for a quick profit and made a 40% in under a month. It was still 60% of current appraised value and 30-40% of ARV and has the potential to lease at 16-18 cap at the high end, 12 cap on the low end.

How did you finance this deal?

Hard Money 12% + 2 points interest only,1yr.

How did you add value to the deal?

Lots of cleanup, repairs, paving/striping of lot etc.

What was the outcome?

Property listed for sale lease

Lessons learned? Challenges?

Industrial warehouses have a lot of different challenges especially when on a well instead of city water. Large warehouses have expensive price tags instead of every repair being in 4-5 figures, in 6 figures. 100k for paving, 100k insulation, 250k sprinklers etc.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Brad Kuskin - Commerical Real Estate Agent, Erick Platero - Hard Money Lender.