All Forum Posts by: Account Closed

Good day,

We hold about 12,000sf empty shell retail space in a suburb of Portland, Oregon. We do have a leasing broker for the space but interest has been low. I would like to learn more about commercial leasing brokers fellow retail owners use and can recommend, especially when it comes to successfully market the space towards national companies. 

Thank you so much for sharing your experience! 

Nikolas

Anyone have any experience investing in single tenant NNN medical offices (ex. Dental Office) and pros/cons vs buying a similarly priced 4-6 unit multifamily property. Assuming CAP rate is identical and neither properties require any renovations.

Thank you in advance to any responses.

Hello, 

I own a MHP in Georgia that came with a working gas station when I bought it. We are currently redeveloping the MHP into an rv park but have no interest in the gas station but still need the land/plat it sits on to be in compliance with the county regs for an Rv park. Looking for the best way to sell the building and business but not the land it sits on. 

My partners and I have a retail center that we purchased using a loan from a local lender in 2021. We are still locked at a cheap rate for a few more years, but we're already starting to plan for the refinance in light of the huge shift in rates (which hopefully will be a little cheaper by then!). I'm familiar with the cheap agency debt available to multi-family. Do Freddie Mac, Fannie Mae, HUD, etc offer long term debt on other types of properties? Ideally we'd like to do a cash-out refi with non-recourse debt for a long-term buy and hold.

Thanks!

Newbie to Commercial RE Investing...

What are the reasons, if any, that someone would purchase a commercial property that has national-brand client with a 15 year Absolute NNN lease IF your monthly debt service is slightly less than the monthly rent (for the first 5 years)?

Is it merely for the tax benefits?

Folks, with rates in mid 6% and CAP 7+ the "standard financing" (20-30% down, 25 amortization, 5 balloon) makes no sense. Cash-on-cash return is in mid 5 with these numbers. What creative options for financing can we consider? I'm asking my banks for longer amortization or an intro rate for 2 years (risky, I know, but with a hope that the rate will go down to the 5% zone), interest-only loan. What else to consider? I'd assume that the banks need to deploy their money as well and the numbers just don't make sense.

I realize that what we have on the market today (available through LoopNet, for example) are not good deals - all of them are in the 4.5-6.5CAP range which makes no sense with the current interest and explains why these deals are not closed. 

I also understand why a cash generating property is not sold unless for a very good price. But what do you guys do to a) find good deals and b) finance them?

Looking for insights and opinions on my personal situation. I am exploring the transition into NNN investing because I'm tired of residential tenants. If someone's heat or toilet is broken I would rather that not be my problem. I thought more units means more money but it also means more issues and more units is not the answer. I'm thinking commerical, good tenant, higher dollar cost but overall fewer units.

I'm looking at CVS and Walgreens with NNN leases. I am a pharmacist and I believe these to be stable companies even though cap rates might be lower to reflect that.

I would be looking for leases with over 10 years remaining since I'm not eager to value add and I would rather put off the potential for having to deal with a possible vacancy until I have more experience in the field.

I'm in New York state and I would be looking to buy in NY. I know with a NNN lease it shouldn't matter since I have no landlord responsibilities and I could be looking nationally, but I like the idea of being able to drive to these locations and check them out for due diligence and at least having it in the same state if I do have to deal with it going dark or have a vacancy.

I'm looking to buy the lowest cost property that's reasonable. Meaning I'm not looking for the cheapest listing overall, but maybe the cheapest that still has over 10 years on the lease. With a high quality tenant such as CVS or Walgreens I'm hoping the down payment would be 20%. With this being my first foray into the market I'm just looking for a good first transaction investing the least amount possible. My returns are going to be greater elsewhere but active management and volatility of the stock market both suck. If all goes well then maybe I either pay down the loan come refinance time for more return, or buy more NNN properties. If NNN is great then sell all residential rentals and accept lower overall returns in exchange for not having to deal with people and issues.

With a $2.5 million listing at 20% down we would be talking 500k down.  I currently have about 800k liquid cash and another $2 million in residential rentals.  

My questions:

1. How does financing work?  Is 20% down reasonable for these high quality tenants?  With residential it was easy, go to local bank and they just finance the deal with 25% down.  I've been searching online to find commercial lenders or specialized lenders for CVS or Walgreens but it seems a lot harder to sort these companies out and terms seem to be a lot more opaque.  Are national lenders better than local lenders for this marketplace, or are local lenders not even a thing?

2. How do commisions work in commercial real estate?  I'm also a licensed real estate broker and for residential properties a trick I would use is to represent myself and collect a commision on the transaction.  So on a 125k duplex my down payment might be 31k, but I would get a 3% commission on the 125k and get almost 4k back.  Is that also possible with a commercial transaction?  Do commercial brokers share commisions the same way?  3% on a $2.5 mil transaction is 75k, which isn't nothing.  Especially compared to a 500k down payment.  But I also know that commissions are generally lower for the commercial sector.

3. Any major "gotchas" in NNN that can blindside a new investor? In my research one potential concern would be a "rent holiday." A lease can have the commercial tenant just not pay rent in the last 3 years of their lease. This sounds crazy in my opinion and is not a thing for residential tenants. Is the owner supposed to charge more in the beginning and just hopefully have it made up for in the overall picture? Seems like it would wreak havoc for stable, consistent cash flow and it's like dropping a bomb on the new owner if it's going to happen on their watch.

Thanks to everyone in advance for their willingness to opine on my life.

@Eddie LeGrand-Sawyer

Can you provide more detail on this program? Or where can we go to get more info?

Thanks!