Commercial Property 2 - Atlanta

Discussion in 'Commercial Property' started by 380, 8th Jun, 2017.

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  1. 380

    380 Well-Known Member

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    Purchase Price     : $805k + 5% Buyers Premium + closing cost = $860k

    Net Rent: $238k

    Net yeild: 27%

    Property Type : Commercial office + warehouse in Techonology Park

    Tenent profile : Long Term Bio Medical company


     
    380, 8th Jun, 2017
    #1
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  2. sanj

    sanj Well-Known Member Premium Member

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    Holy moly 27%, nice work!
     
    sanj, 8th Jun, 2017
    #2
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  3. Brady

    Brady Well-Known Member

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    Now that's a yield.
     
    Brady, 8th Jun, 2017
    #3
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  4. 380

    380 Well-Known Member

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    Thank you, excited about this one.

    Apparently this CIP was at one point worth $3M, we picked it up for $860K after closing/settlement.

    We have been searching for some time but prices at auction regularly go over the reserve.
     
    380, 8th Jun, 2017
    #4
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  5. 380

    380 Well-Known Member

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    Atlanta CIP yields on average around 7-8%, this one was a no brainer, and land size a bonus.
     
    380, 8th Jun, 2017
    #5
  6. Brady

    Brady Well-Known Member

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    You mentioned some repairs are going to be required soon, whats the estimated cost for the repairs?
    Given the lower labour costs, guessing it's not going to be a massive hit.
     
    Brady, 8th Jun, 2017
    #6
  7. 380

    380 Well-Known Member

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    Need a new roof at some point of time ;

    It's $110 a sq
     
    380, 8th Jun, 2017
    #7
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Definitely a little gem.
     
    Scott No Mates, 8th Jun, 2017
    #8
  9. Brady

    Brady Well-Known Member

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    Anymore details on the lease. Term, options etc
     
    Brady, 8th Jun, 2017
    #9
  10. 380

    380 Well-Known Member

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    1st is signed for 3 years ($170k a year)
    2nd is due to vacate at DEC 18 ($66k a year)

    Upon end of auction- 2nd is seeking extension till end of march 2019

    Enough time to to market and replace 2nd one !
     
    380, 8th Jun, 2017
    #10
  11. Brady

    Brady Well-Known Member

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    Nice one, whilst lease isn't that long the reward looks to match the risk.
    Interesting that the 1st didn't look to purchase themselves.

    Did you manage to secure finance in the US or was this a cash deal?
     
    Brady, 8th Jun, 2017
    #11
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  12. 380

    380 Well-Known Member

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    1st tenent has been there for over 8 or so years!

    Still trading cash ;( no finance as yet!!
     
    380, 8th Jun, 2017
    #12
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  13. thesuperman

    thesuperman Well-Known Member

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    Geez, is 25%+ net yields in the US common for commercial properties? What are the usual yields in the US?
     
    thesuperman, 8th Jun, 2017
    #13
  14. 380

    380 Well-Known Member

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    Usual yield in USA is around 7-8%.

    We have seen some gems where you can buy at 8% but there is a twist, you can develop the land and increase the yield significantly this way.

    It can be also very difficult dealing with the re agents in US, its common that they never return calls.

    We have had some success recently with buying via auction. Though with our first auction the price went $2M over reserve, was discouraging at the time.

    US auctions are on line and there is a cut off time, ie 24 hours, final bid wins.
     
    380, 8th Jun, 2017
    #14
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  15. thesuperman

    thesuperman Well-Known Member

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    You'd think agents would return all calls from buyers. Don't the agents want to sell their listings? lol
     
    thesuperman, 8th Jun, 2017
    #15
  16. Biz

    Biz Well-Known Member

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    ****! That's the one that killed Elvis!
     
    Biz, 8th Jun, 2017
    #16
  17. 380

    380 Well-Known Member

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    The buzzards have too many buyers and we are learning they are lazy, they don't need to work too hard
     
    380, 8th Jun, 2017
    #17
  18. 380

    380 Well-Known Member

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    Viva Las Vegas. babeeeey
     
    380, 8th Jun, 2017
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  19. Player

    Player Well-Known Member

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    No different to how they operate here when things are bullish. Properties ostensibly sell themselves.

    Great work guys. This is a really juicy deal.
     
    Player, 9th Jun, 2017
    #19
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  20. 380

    380 Well-Known Member

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    Your quite right.

    Thanks, very excited about this deal, as they say "its all about the numbers"
     
    380, 9th Jun, 2017
    #20
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