All Forum Posts by: Steven McPherson

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.

Is this a 2nd generation space or a shell?  Are you offering TI packages?  Sounds like pricing might be turning off some prospective buyers.  Have your brokers made calls to tenants in the area that they feel might fit well in that space?

I know you said your property is mixed-use, but what asset class specifically? I always try to use NNN when possible since it provides the most financial advantages for the owner and protects them from fluctuations in taxes and property insurance (which is a huge protection here in Texas). Typically, you see full-service (gross) leases being used for CBD office buildings, but most of the retail centers in my market are on a NNN lease.

You local commercial brokers who have experience in that market would be the best ones to talk to.  Find one that is a member of the International Council of Shopping Centers, whom all of those national tenants are a part of and are in the database.  I have experience with this in my market in DFW, TX and I'm available for DM if you would like some guidance from afar.

I'm a commercial agent in Fort Worth.  Where is the property located specifically?  DM me and I may be able to refer you to someone who can help.  I have a couple of contacts that specialize in medical and assisted living facilities.

100% what @Chris Mason said.

But I'm just curious: Why did you choose a NN lease and not a NNN lease?

Are you the landlord or the tenant?  If you are the LL, either an attorney can write one up pretty quickly if it's a complicated lease with special provisions, or your State Association of REALTORS should have a promulgated form you can use (I've had people pay me $150 to write on up for them in Texas where I'm licensed).  I would only recommend the promulgated form if it is a simple and straightforward lease. 

If you are the tenant, the LL should provide the form in almost all cases.

@Kevin G.What is the current zoning of the "home"?

As many on here have said, syndications seem to be your best avenue right now based on what you have said.