All Forum Posts by: Cole Bigbee

Flex is a great long term play! As @Henry Clark mentioned, your soft cost and site work seem high. I would dig into that further and get a breakdown. Don't be afraid to get a separate civil engineering firm instead of just contracting with an architect to handle all. Just let the architect handle the Arch and MEP drawings. This will save you some markup since the civil plans would be the costly of the two. I would imagine your site work costs is strictly a budget since you have not had any civils completed. It might be a good idea to tie the site up as long as you can to get some soil testing and at least some preliminary drawings done by the civil engineer to see exactly what the site work costs will be. 

I would not overthink a Proforma. It should not be much different from any other real estate proforma. If you already have a preliminary site layout showing the size and quantity of buildings you can put on the lot, you should be able to take that work on some budget construction costs and from there work your possible rents into the equation to see if what you have drawn makes sense cost wise, or if there is a more efficient way to lay the site out and reduce costs. 

I've developed a few sites that were 5 acres plus industrial builds. Depending on the shape of the lot, your site work and underground utilities will be some of your bigger costs. I'm happy to help anyway I can. 

I think a good retail broker is a great place to start. They usually have a good "beat" on who needs space in the market and at what locations. They can save you a lot of time and money! 

@Dilip Jeyram It might be wise to look at a smaller building to start with. 15,000 sqft is going to require a sprinkler system and most likely, the tenants you will be marketing to would not need the sprinkler system. This can be a large expense in your budget, and something you would have to maintain and inspect yearly as the landlord. You might start with a 6,000sqft building, lease it up, then build another 6,000 sqft beside it. 

@Brent Thomas Great looking building! 

@Jamie Boyd That sounds a little high for only the shell but unless you have some preliminary drawings to work off of, you're always going to get a high budget. Best thing to do is spend a few bucks and get some drawings done so you can get more "hard" numbers. Cost on a 10K sqft shell(not including land) should be around $75 sqft. This would include about 1,000sqft of basic office and restroom and the warehouse area being semi heated only. No AC.

@Sean York I think it is a great play. You just need to get specific on a certain city in Texas and narrow down the areas that are properly zoned for the flex space inside that area. There is quite a bit of flex in Texas already. Drive those buildings and notice the ones that are rented and how they are setup vs the ones that are not rented. Nothing wrong with copying someone else's strategy that already works.  

@Derek Bell

Will do and yes, happy to help anyway we can. 

@Derek Bell

Like a Nichiha panel? No, I have not personally done it but I know several people that do. 

There is 8 acres in a great location along the river that was the former site of a fertilizer manufacturing plant. The plant was demolished 2 years ago and the property was put up for sale. I viewed this property over a year ago but passed due to other opportunities that came up at the time. I drove by it last week and noticed it was still for sale, but at a lesser cost. When I ask the broker what kind of DD time I could get, he said none. The company is from out of the country and will not give any due diligence terms or any environmental information. Definitely suspicious but almost worth taking a chance on at the current price. 

I've done my fair share of Phase I and Phase II on many properties and turned down some because of bad Phase IIs only to find out that remediation was not as bad as I thought.   

My questions are as follows:

1.) What kind of liability would I be looking at if I purchased, only to find out that it was badly contaminated?

2.) Don't large companies, such as the one that owns this site have insurance that covers environmental issues?

3.) I find it hard to believe that once the site was decommissioned, and that an Enivronmental agency did not come in and inspect. Don't you think?

4.) What are your thoughts with just getting a company to do a Phase II for me even if I don't have it under contract?

5.) What else am I missing? Any agencies that I could call that could give me information?