All Forum Posts by: Steven McPherson

DM me and I'd be happy to talk with you.  I made a career change to commercial real estate brokerage a few years ago and definitely learned some lessons along the way.

I'm a retail property leasing and sales broker in the DFW area.  The above posters are correct.  Retail is a great investment but requires a significant amount of capital up front for leasing commissions and tenant improvements.  If you are leasing a 2nd generation retail center, you can typically offer several months of free rent to help offset build-out and startup cost.

You can find tenants that won't require those concessions, but these are typically mom-and-pop startups and they bring with them a lot of risk.

Feel free to DM if you want to talk further!  I love discussing these types of things.

The other two responses are spot on.  I just want to add, from a listing agent perspective, I am much more inclined to deal with a party who is represented by a broker than one who is not.  If they are not, I'm skeptical until they can prove they are competent in how to carry out a transaction.   The likelihood of getting a deal done increases tremendously when the other party is represented by a competent commercial broker.

Offering this 4-unit SFR rental portfolio for sale. All units must be sold together.

- Asking $625,000

- 75% leased (one available for lease)

- Long term tenants and stability

- See LINK for more details and contact information.

Melissa - I'd love to connect.  I am a retail broker in DFW but our office has broker connections to Austin and its surrounding market.  Feel free to DM me and I can provide some further guidance and put you in touch with someone.

What market are you located in? Overall, CRE is tough in finding deals right now regardless of asset class, and people are pessimistic about the next few years. In my area (DFW), we're seeing that smaller, one-story office is doing well. Medical/dental office is very strong and will remain that way. Multi-story CBD office buildings in downtown urban areas are the product that is struggling.

When you say temporary, infrequent use, are you speaking about leasing smaller Executive Offices or running a business similar to WeWork?

The 10-year is pessimistic about the next few years. There is no way sellers are selling at caps that high unless there is a special circumstance, so buyers just aren't buying. When I see deals that do pencil for an investor, the LTV is 60% or less (I deal with mostly retail and industrial). The CRE market is tough right now.

I used to work in Planning & Zoning.  Henry Clark had a great response above, but you can also just reach out to a Planner in the City Planning & Zoning department if you are still unfamiliar.  They can inform you of the process and the chances of your proposed use getting approved by P&Z and/or City Council.

It depends on the market and the mall.  I can only speak to the Texas market, where malls that focus on creating consumer experiences (coffee shops, kids play area, entertainment-based tenants) are still performing well even in this age of online shopping.  The indoor malls that simply offered shopping and a food court are the ones dying off.

I've seen some malls be demolished and replaced with high-density single family developments.  It all depends on how the deal pencils.

I can't speak to the Denver market since I'm in DFW, and obviously can't speak to the specifics of your building since there are so many varying factors.  But I agree with an above poster that $10 psf in tenant improvement seems low, unless you can find a turn-key tenant to occupy that will require very little renovation.

In DFW, for 2nd generation spaces, I've seen LLs underwrite at about $25-35 psf in expected TI allowance (subject to the lease terms and tenant credit rating).  If it is a cold dark shell, we would do $60-65 psf.  And also, I see many LLs simply offer several months of free rent in lieu of TI if it's a tenant that fits.  Also, make sure you account for broker commissions if you choose to use one to lease your building.

Best bit of advice I have, get in touch with a local commercial broker who specializes in that asset class if you haven't already.  They will be your best source of information on how to underwrite these deals and what to expect in your market.