All Forum Posts by: Quentin West

I'm with @Adam Martin. It is our company policy to allow for access up to 24 hours (with owner approval) in advance of the lease start date. This tends to create substantial goodwill with tenants at little/no cost to the owner. We use a lockbox and provide access information at the 24 hour mark. We also conduct our own walkthrough prior to the tenant taking possession and then ask the tenants to conduct their own video walkthrough once they've taken possession. Both of these policies were implemented due to Covid, but they have been pretty successful, especially with weekend move-ins. We just let the tenants know that the office is closed on Sunday and if they have any access issues they will have to deal with them on their own until we reopen.

Thanks @Greg Dickerson. The current level of uncertainty definitely makes things challenging, but I spoke with someone yesterday who thought it might also be a boon? Since the hospitality sector, in general, is not doing so great the playing field might be a bit more level for us as investors look at deals. He did say that this likely wouldn't be the type of deal that anyone looking to attach a third-party operator would go for. It's more likely a hobby project or owner-operator type situation.

The owner also has completed most of the PIP to have the hotel flagged as a Ramada, so we're hoping that alleviates some of the potential risk.

I have a client in Baltimore who is looking to sell a 25-key boutique hotel. This is definitely a challenging time for hospitality properties in general, and the kicker is that this hotel isn't currently operating. It's been closed over a year for renovations and just as they were finishing up, COVID struck. I haven't worked with hotels before so I wanted to get some advice from any BP members who have experience in this asset class.

As hotel investors, what would you look for when evaluating a deal like this? The property is in a great location with lots of development occurring nearby. It's a beautiful historic building and the hotel is not currently flagged. It's pretty much ready to operate with the exception of the restaurant they were putting in--they halted construction during the pandemic. Would past performance be the best indicator of the hotel's future profitability? The owner also has a larger 125-key hotel in the city and the same team operates both hotels. Unfortunately, the GM paid a bit more attention to the larger hotel and the smaller hotel's performance suffered as a result, so I think there is a significant upside potential with proper management. Is this something that could be communicated to future buyers or would that matter as they would most likely bring in their own management? I've also considered exploring the possibilities of a condo conversion project, but there is already a lot of new product in the pipeline and I don't see many potential developers wanting to get tangled up with the historic preservation folks.

Would it be worth hiring a firm to conduct a feasibility study to use as marketing collateral or is that just a waste of money? Especially considering that with Covid all assumptions are up in the air. The deal is interesting but has its challenges for sure...Any advice would be greatly appreciated!

I have a client that is interested in purchasing a large estate to use as an assisted living facility, but they aren't currently able to swing the down payment. The seller is asking $2.4M and is willing to carry the note with  $250k down. 

The buyers own a small assisted living facility currently and are interested in expanding so I thought that an SBA loan for the entire purchase price and necessary renovations might be the way to go here, but I would love some suggestions from others on this forum about how to approach this. 

The buyers are reluctant to mortgage the property, so we have been looking at various ways to attract equity to fund the initial down payment. Does anyone have experience in this area?

Thanks!

I would be interested in hearing what others have to say on this. We are currently consulting on a redevelopment of a large hospital site, and one of the central pieces of our plan is to have a co-working/co-living component on the site. My experience with this sector is limited to the research that I've done for that.

We are going after large co-working/co-living companies like WeWork so we're not as concerned about risk, but I would imagine for the smaller spaces/companies that is much more of a concern. A smaller tenant might be able to receive support from ED groups depending on what programs your local ED agency offers. That's something that would vary by tenant. The same is true of investor support I would imagine. 

I came across an interesting co-working wiki. It might be able to give you some more information on the sector.

I was in a similar situation six months ago when I got my license. Do you all subscribe to a data service like Costar? It can be a great list building tool, and the reps can give you good advice on how to go about targeting specific market niches.

When I first started and didn't have access to Costar I compiled lists of businesses using Hoover's, Google, etc. that had some relation to my own personal or professional background. I used that as my call list. My broker fed me a few leads to get me started and I was able to establish a focus area for myself based on my interests and skill set. The brokerage itself doesn't have a particular focus on any one commercial asset class, but the individual agents all have their own niche. We're a small shop so it works well for everyone.

In terms of sourcing deals I think @Jacob Wathen's suggestion is a good one: get out into the community and make yourself known. Going door to door is definitely one option. I also attend various small business networking events, startup conventions, and chamber of commerce events. One good approach for us has been to work closely with our local economic development organization so that they feed us leads whenever small businesses come to them for startup help or out of state businesses contact them about relocating. In terms of investment sales, holding seminars or information sessions targeting specific demographics that are likely to invest in real estate is a great way to provide value and hopefully capture some of that market share. Setting up some type of direct mail campaign targeting small business owners and investors might also be another strategy. The possibilities are only limited by your creativity. 

@Pete Schmidt I agree with @Joel Owens, you are probably better off seeking out a commercial broker to help you with this. Furthermore, if you are planning on buying, the market cap rates aren't that important in my opinion. What is your target return? You may find something trading at a higher cap rate than normal for the area, but if it doesn't meet your target return are you still going to buy it?

Things tend to change a bit when you go to sell and need to determine a sales price...

@Paul Parker, in addition to the things that Chris mentioned as being important to potential purchasers, I might also look into Fed/State/Local incentive programs that might make your area more attractive. Most states have economic development incentive programs that effectively reduce the cost of development/operation through subsidies, tax credits, etc. When I work with clients on development projects and land deals I try to do as much of the legwork regarding demographics, rental rates, incentive programs, possible financing, etc as I can so that potential purchasers have all of the information that they need. 

For your data research I would check out the data site ESRI. They have a free trial option that will allow you to run ring radius or drive time reports on a specific location. The trial is for 21 days or 200 credits (roughly 20 reports). You can access just about anything you need in terms of demographic data, trip counts, daytime employment, etc. One of my favorite reports is the Retail Marketplace Profile which gives you a retail gap analysis on your selected area. It shows estimated supply and demand (in $) by retail/food industry classification. You can use this to target retailers of underrepresented industries. Good luck!

Great advice @Joel Owens. Have you ever had a situation where the listing broker refused to pay what you were asking for your fee? What did you do?

I haven't used Axiometrics or Yardi Matrix, but Costar is a good choice if you are planning to work among several asset types. If you're just sticking to multifamily one of those other services might be more useful. I was recently told by a Costar rep that after acquiring Apartments.com their multifamily data is much better than it was previously, and yes @Bryant Patterson they do have ownership information. Sometimes they even have phone numbers/emails for owners. It's not always accurate, but in my experience it has been correct most of the time. Even when it's not, a simple public records search can usually lead me to the missing information.  Another benefit of Costar is their research team. You are assigned a researcher, and each property has its own researcher. You can contact them to pull more detailed information on a property, research rent rates, run a property survey using your own criteria, etc. As with anything, I would always vet the information yourself.

The subscription that my company currently has allows us to see full property information for all commercial properties in MD-DC-VA-WV. We can also access for-sale listings across the country. I'm not sure what our cost is, but I previously worked for a municipality that was paying somewhere in the neighborhood of $20k annually for Costar so I know it's not cheap...