All Forum Posts by: Derek Bell

@Cole Bigbee

Would love to know what a pemb specialist thinks of this. 

Has anyone ever tried to increase the size of a PEMB? In turn, you would raise the annual NOI. Let's say you have 4 acres of industrial zoned property with a 20k sf pemb. Most developers would just utilize the extra yard space for outdoor storage. But if you have enough room to expand the warehouse portion of the pemb, the topo is level, not hitting on a setback or ROW, an easement, etc…..then why not expand? And if you time it just right when your tenant lease comes due, or have a tenant that just needs the extra space, then it's a win win since you dont have to have any vacancy.

I guess about the only thing that would worry me the most would be that if you add to the existing building, and if the city code has changed since after the initial build, then they are gonna want you to make all the necessary changes to the existing portion of the pemb. Also, may have instances in which if you go over a certain amount of useable sf you may have to fire suppress a building that would not originally have to be since it hit that minimum space requirement. Further, you may have a situation in which it changes the parking requirement etc. Oh yeah, and you would have to look at the load requirements on the endwalls, especially if the pemb doesn’t have some kind of expandable endwall. 

Maybe it doesn’t sound like a feasible idea now that I think of it. I guess, just like in residential, sometimes its easier and less expensive to just bulldoze and start new then trying to do an addition. 

Thoughts??

Has anyone had any experience in the assisted living/nursing home complex type of developments?

I have 12 acres in middle tn that I am working on entitlement with the city. Front 4 acres is zoned commercial, rear 8 acres is zoned large lot residential. I am parceling out the front acreage into (3) one acre commercial lots. The back 8 acres I was leaning towards townhomes, but I don’t think the city wants to see any additional townhomes. I am thinking a rezone to a commercial mixed use. I do know the city would like to see assisted living type property. So, for my proforma, how much does a developer or  assisted living company pay for entitled land in this type of space? Ground lease? Fee simple purchase?

I am used to posting under “commercial real estate”. I usually only do commercial/industrial developments. But I have an opportunity that I need some input. A seller and I are going to be under contract soon for a 13 acre parcel in middle TN. Very up and coming city located about 30 miles south of Nashville. Property is located at a wonderful highly traffic location. 18k cars a day and will only be increasing. 5 of the 13 acres is zoned commercial, the back 8 acres is zoned large lot residential. I want to keep the commercial zoning up front and parcel those off. The back 8 acres I want to rezone to a small lot townhome use. Just initial talks w my civil, I think we can get 40 pads or so. So, how much do residential developers pay for 40 or so townhome pads?

I am not going to do any improvements to the land, just improvements on paper etc. The topo is good. Not great, but good. All utilities are at the street. 

Also, make sure there is some kind of waste management agreement. Especially if the tenants are all nnn. The dumpster is ALWAYS an issue on site. One tenant will use it too much and the others will *****, blah blah. Another will fill it too high and then get hit will overage charges which the others have to pay. Etc etc.  And illegal dumping is an issue as well. I would say thats the biggest issue I have when it comes to these multi tenant commercial/industrial flex warehouses. 

@Jon Sidoti.  Buying already built and operating? Absolutely. I’m in. But getting anything in my area that the big guys dont gobble up first is nearly impossible. That or pay a 6 cap for a 60 year old building with Billy Bob Hot Dogs as a tenant. The cost of everything is just really high right now. I am sure glad Bidenomics is working. 

@Jon Sidoti I just had to table a project. I have full civil and architectural plans and the city has already given me a grading permit. Prices are high. Just like @Henry Clark , the numbers work but I think I am just going to move on to the next opportunity. It was for 2 buildings totaling 18k sf. Total of 5 tenants. It’s more of a retail flex other than flex industrial. Rents would be anywhere from $18-20/sf nnn. 

The city is making me extend a cul-de-sac before they will allow me to parcel the builds from the remaining acreage. So that is really killing my price. But essentially, it’s costing me almost $190/sf to build the buildings. My plan was to build 3 more after these 2, but think I am just going to sell off the 8 acres w the plans etc and let a bigger developer take it over. 

Hello BP. 

I am not new to RE development, but most of my concentration through the years has been in commercial flex warehousing and industrial development. I am the developer and the builder for all my projects and usually just do a few projects at a time. Most of all my forum activity has been in the commercial section of BP. 

I recently came across an 8 acre property. It is currently zoned agricultural and the property would be great for multi zoning. The seller has agreed to put the sell of the property contingent on rezoning. So, I dont have a ton to lose other than my civil costs, application to the city, lawyer, etc. That can be costly, but I’m ok with taking the risk. 

I dont plan on building anything on the property, if and when, it gets rezoned. I will just market the property under the new zoning. The market has lessened a little on the multi in my area, but I think there is a ton of potential in this property. 

I know I will have to go three or so stories high, but how do you decide on the what density to propose to the city? And then how do you value the property based on the density etc? 

I know my architect and civil eng will help on those deciding factors, but just wanted to see if anyone had any thoughts. I’m sure this has been discussed a million times in this forum. 

Thx in advance. 

@Ronald Rohde

I should, but I’m not. I sure wish I were. 

Damn. Now you got me thinking of listing the property again. My broker wants to list the two buildings for 3.1m

I owe 2.8 on everything. Again, this will leave me the 11 acres to own outright and be able to build on it debt free. 

@Lucas Thomas

You make a good point. With my two building rents and land leases combined I will be about breaking even every month. My NOI per month is 21k. If I get rid of my current loan at 3.5%, and it goes up to 7% or so, that would be a little over 20k monthly.

The total 14 acres is almost the entirety of the road. I would love to maintain ownership of the entire road.

I guess I could always move forward with getting the new loan and construction loans on the two buildings and just sell if I get in a pinch. The extra financial commitment doesn’t worry me, its just the amount of debt that I will have that makes me nervous. 

Going from 2.8 mil to 5.3 mil is a tad much for this guy. 

But once I finish construction on the two builds, the total 4 buildings and remaining land will be easily worth over 9 mil.