All Forum Posts by: Mike Giudici

Do you have a broker listing the property or are you only relying on craigslist ads? Do you have a local Property Manager?

@Jim Workman 

The middle layer will increase the systems durability.

How long do you plan on owning the property? 

@Richard Weisman Just out of curiosity, how do church Tenants de-value a property? I manage a property with a church as a filler Tenant. While I'll admit it's a little untraditional for that use at this property, they don't bother anyone, they pay market rates and are never delinquent.

Certain types of Tenants can certainly impact a properties value, but I guess I never put church users into that category.

Does anyone have any resources or information on good single stream recycling solutions for multi-tenant buildings? I am trying to find local providers, but am having a difficult time finding someone who has a good program geared towards multi-tenant buildings. Mst of what I am finding is more for single tenant buildings. Any help would be appreciated! 

What are you looking for specifically, and are you talking about property within the Detroit City Limits? There are many things for sale in the local market(s). Retail, Medical, Industrial/Flex, Land, Office, etc.

As one could imagine, there is lots of "value add" inventory here.  

Increasing Income:

Adding carports

Adding laundry facilities

Onsite storage

Partnering with cable/ internet providers for revenue sharing opportunities

Improve leasing

Collect outstanding receivables

Upgrading the units and adding amenities to common areas will command higher rents, etc.

Decreasing Expenses:

Rebid all service contracts

Rebid insurance

Appeal taxes

Review staffing

Preventative maintenance where needed

Upgrading heating and cooling systems

Upgrading lighting systems

Adding insulation

There are many ways to add value to a property, these are a just a few

You should leave the patio alone or tear it out and replace it. Patching or resurfacing will be a waste of money.

1. How much term is left on the existing leases? 

2. Are the leases NNN?

3. Are there any outstanding receivables?

4. What are the operating expenses?

5. How does the property compare to neighboring competitive properties in terms of occupancy and rental rates? 

6. If the elevator needs $80k worth of repairs now, you are better off modernizing it. I am doing a mod project now for a 6 stop traction elevator now and the price tag is $120k, which doesn't include misc. machine room upgrades required by current code. When you modernize you will be required to update the cab, fixtures and machine rooms up to current code.

7. If the elevator has been in disrepair for the past 2 years what other building systems are potentially in poor shape or have gone long periods without regular preventative maintenance? Roof, boiler, HVAC, plumbing, electrical, etc.

Based on what you have told us so far about this deal, I would walk away.

I manage several retail centers and my experiences are for the most part positive. The management fees are typically a flat rate for smaller centers, and or can range from 3%-6% of collections on larger centers. Tenant relations can be all over the place. Most national Tenants have multiple contacts for various things i.e. leasing, accounting, legal, etc. and the mom&pop type Tenants tend to be one point of contact. As long as you are in regular contact and are responsive to their needs, things tend to go smoothly. Although smaller tenants tend to struggle with the terms in their leases.

The most important things that come to mind are:

1. Understand the owners objectives with the property. Is it a long term hold, a value-add, short term hold, are they using it for cash flow, etc.

2. Administer the leases properly and enforce the terms of the leases fairly among all Tenants.

3. STAY ON TOP OF RECEIVABLES!

4. Keep NNN charges as low as possible without neglecting maintenance, this will allow you to maximize rental income and keep operating expenses low resulting in a strong NOI for the owner. Remember - every dollar you can add to the NOI increases the value of the center.