30 thousand square foot building for sale…what’s a fair price?
Working on a deal for 30k sq ft office space which will lease at 18ft.  If it will all be leased with 10 year triple net leases what is a fair price for the property?  We offered 3.25 mil but it’s going to need 15k sq foot remodel but should be mostly cosmetic.  I know there are other variables just curious if it’s in the ballpark.
[{"id": "imj8ipz", "text": "$108/sf? You\u2019re going to need some comps for the area this building is in. At that price\u2026the building would be in the shittier areas of my market and have a lot of deferred maintenance. \n\nToo many unknown variables for anyone on here to help you. Maybe provide more info?", "replies": [{"id": "imjaflv", "text": "Can you quote me the value of a building that's 10k Sq ft. It is in w location, it's x years old, has y rental income, and has z in estimated repairs. If you could estimate the value within 10k that would be great. \n\nI know I am just trolling here. You are much nicer than me.", "replies": [{"id": "imkeoe0", "text": "They did comps in the appraisal.", "replies": [], "depth": 3}], "depth": 2}, {"id": "imk4gvd", "text": "We are in a smaller city\u2026leased mostly by hospital and half from a group of doctors.", "replies": [], "depth": 2}], "depth": 1}, {"id": "imjac0f", "text": "What is the credit of the tenant, what is the cap rate? What is your cost of capital? Extensions?", "replies": [], "depth": 1}, {"id": "imjcypi", "text": "This is completely variable depending on market/submarket/other specs. Industrial builds are graded differently.", "replies": [], "depth": 1}, {"id": "imjdqz3", "text": "Not nearly enough information. I\u2019ve seen vacant assets that\u2019s can\u2019t move for $80/sf. On the flip side, I just sold multiple vacant assets in DFW for over $500 per square foot.", "replies": [{"id": "imjfyg6", "text": "It is occupied currently and we have had appraisal.  It appraised for over 5million.", "replies": [{"id": "imjgmg9", "text": "The market hates office deals right now so cap rates aren\u2019t all that aggressive. Without knowing the credit of the tenant of specifics of the market, sounds like roughly a 7% cap deal. If I were the owner I\u2019d be targeting $7.7 million less the costs of the required remodels. If i were you, and if the deal is multi tenant, I think a 5% vacancy factor is market underwriting so at a 7.5% cap id think $6.8 million is fair, less the costs of required improvements.", "replies": [{"id": "imjgzzm", "text": "So getting it at 3.25 is a good deal.  The building in in a small city next to a hospital and is used as medical offices.  I\u2019m secure with the tenants being able to stay in the building.", "replies": [{"id": "imjhznt", "text": "My focus is exclusively medical office so feel free to PM me, but yes it sounds like a great deal.", "replies": [{"id": "imk4835", "text": "We had it appraised for 5.2 million.  It was built in early 80s but is in good shape within a rocks thrown of a hospital.", "replies": [], "depth": 6}, {"id": "imk4vml", "text": "I\u2019m sure it\u2019s a good deal if I getting it for close to 40% below appraisal I just wanted to hear it from people in the business.  I have had no experience in commercial real estate.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "imke2oe", "text": "It scares me people ask reddit advice on multi-million dollar decisions.  Especially something that is extremely specific to a submarket.  \n\n&amp;#x200B;\n\nOP,  an appraisal helps but you need someone that lives and breaths this submarket to give you an opinion.  Nobody on reddit can help you unless they work this submarket and know what those TIs are going to cost.", "replies": [{"id": "imkednc", "text": "I\u2019ve asked others.  Don\u2019t think I\u2019m getting any important questions answered here.  Just trying to get some feedback man.  Sometimes it\u2019s easier asking people you don\u2019t know.", "replies": [], "depth": 2}], "depth": 1}, {"id": "imkj1yw", "text": "Really market and layout dependent as well as deferred maintenance.", "replies": [], "depth": 1}, {"id": "imlvt5r", "text": "My neighbor has a car. It's 2 years old,  Has 25,000 miles on it.  It's red.\n\nWhat should I pay for it?", "replies": [{"id": "imlw20g", "text": "I forgot;\n\nIt has 11 parking stalls and there's a DQ within 12 blocks.", "replies": [{"id": "imlyqj9", "text": "Funny man.  If you read I said what it appraised for.  Get your car appraised and pay 60 cents on the dollar and you will be in a similar deal.  Would you do that?  That\u2019s my question.  Be a smart ass all you want.", "replies": [{"id": "imny7u4", "text": "There's only one thing worse than being a smart ass.", "replies": [{"id": "imnyf5l", "text": "I\u2019m sure you get that a lot.  I\u2019m secure with my intelligence.  You be you!", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]