All Forum Posts by: Joshua Spurlock

20yrs remaining. It just opened Q1. 

2% annual rent increase. 

I am in the process of completing my first 1031 exchange. I just closed 2 weeks ago on the properties funding the exchange, and I have been relentlessly looking for a commercial property to roll the money into. I think I have found the deal, but the tenant is a Urgent Care. Does anyone have experience with an Urgent Care as the tenant. The rent for the location is $25k a month, do they turn that kind of numbers to support that rent. Also, the lease is for 20yrs, doesn't that speak volumes to their confidence or is this just a tactic used to secure great real estate?? I am a newbie to commercial property, any help is greatly appreciated.  

1) Have you asked for their business plan or sales projections?

2) What type of lease are they now, net or gross lease?

3) You could allow them to occupy the whole building for the current base rent plus a percentage of sales.

Russell Brazil, what if the low ball offer is made with no contingencies? No inspection, no appraisal, no financing contingencies. Due diligence would consist of lease review and confirmation of CAM and other expenses, which these would be the only deal breakers. 

Hello all! I just sold my first portfolio of residential properties. I am looking to be more involved in the commercial arena. I will be 1031 exchanging the proceeds I have. My question is about a property I want to buy. The property is listed for $1,550,000 at a 6.36% cap. I would like to acquire the property on an 8% cap($1,232,250), which would allow me to pay cash for the deal. It is a single-tenant, commercial property, built in 2015 that has a triple net 15yr lease. Is the 8% cap too low of an offer? 

1) Leasing the entire building to control parking doesn't sound advantageous, for you or them. Will controlling parking really help sales that much? If it does, then they can pay the premium to occupy it all. 

2) Absolutely there should be a premium to drop the term length and add expansion. I like to look at things on a scale, so let's scale down for this scenario. If I rent my apartment for a year, then I have 12 months to plan and pursue other opportunities. If I rent the same apartment for a month, then I have 30 days to plan and pursue other options before I have to redirect my time and attention back to the asset. Thus, there should be a premium paid, for me to accommodate you. Also, IT IS KNOWN THAT IT IS MUCH MORE TIME CONSUMING AND COSTLY TO ACQUIRE NEW BUSINESS (or tenants), THAN IT IS TO RETAIN CURRENT BUSINESS. THAT'S WHY IN SALES, REFERRALS ARE KING!! So, Mr. Tenant your value was the lease length. If you would like to decrease the lease term, then there will be compensation to do so. I would be easier on the lease reduction if I saw potential for the tenant to grow long term, but they just need the shorter term for the, "what if" scenario. Have they explained why they want the shorter term?

3) In my opinion it all boils down to the numbers. You have to make the numbers make sense with any direction you take. 

4) Who are your other tenants and how long are their leases? 

5) If this tenant were to leave can you still make payments?