NNN Gym Case Study
I am learning about commercial real-estate (aiming at owning one in next few years). Could you please give me tips / opinions about this property.

[Loopnet URL Gym in Brentwood, CA](http://www.loopnet.com/Listing/20425131/180-Griffith-Ln-Brentwood-CA/)

Brentwood is located in a relatively remote suburb of San Francisco bay area. It has a good school district, lots of land, lots of new residential buildings (at attractive price, growing population). Recently, BART (public rail service) opened there so that helps a lot with transportation to the downtown San Francisco (one way 2 hours).

Retail spaces are in significant decline lately. My personal impression is gym business is OK. (Question, where to lookup this piece of data)

I also like the 6.75% Cap rate. 

Here are my comments / questions, please feel free to let me know what else you will ask / find out / concern / find important ... Thanks!

 * how to find out which business is thriving / declining lately;
 * how to compare location of my interest with other gyms ...is there any data to find out?
 * For the first time owner, about what percentage down payment I am looking at? What will be a "reasonable" loan rate?
 * As NNN, what else is the land owner's responsibilities?  
 * How to determine rental rate (where to get comp data)? 
 * In case of business bankruptcy, what typically happens?
 * What are the steps to rent this facility out if current renter left?
 * What kind of financial backup required to own this facility (i.e. cash requirements in case of vacancy).

I realized that these are 101 questions.  If you could recommend a web site / book about similar cases, I will really appreciate it. 

Disclaimer: I do not have any intention to purchase this property. Just curious.



[{"id": "dlutxmq", "text": "NNN loans are often based on tenant credit and run parallel to the main term so if there's 5 years left, then the loan is due in 5yrs. \n\nIf your tenant isn't investment grade with a Moody's or S&amp;P rating you most likely won't get the best terms and interest rate, and likely have to put money down. Typically on a NNN loans are for 65-80% LTV thefore 20-35% downpayment, not including closing costs and all the enviro and other requirements by the lender.\n\nI had an offer for a Walgreens with 4% interest due to their ratings but the loans was for 65% LTV\n\nBankruptcy means tenant either comes to renegotiate or bails on you.\n\n", "replies": [{"id": "dlvcmuw", "text": "Thanks\n", "replies": [{"id": "dlvezf1", "text": "I don't know where this guy is finding 80% loans. That seems very unusual for commercial real estate. Also, most loans mature before or after the lease term, as the building would be near impossible to refinance if it was vacant and the lender doesn't want to be stuck in that situation. ", "replies": [{"id": "dlvth6k", "text": "80% LTV loan are out there for NNN with a solid single tenant. I saw a coupl for 75% LTV just a few weeks ago and was told a lender who liked the tenant was open to 80% but I didn't ask for the caveats. ", "replies": [{"id": "dlxe48l", "text": "Yep some of the small-mid size banks are still doing 80% that have a NNN IG tenant. My old bank did a few while I was there (2013-2017).", "replies": [], "depth": 5}], "depth": 4}, {"id": "dlvyo54", "text": "Look up CTL Financing. Embarrassing that it exists (it's risky as hell), but 80% is beyond standard for something like that.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dlvmx01", "text": "Landlords responsibility on a NNN all depends on the Lease terms. LL is usually responsible for taxes, insurance, parking lot, landscaping, exterior of the building and roof repairs (tenant reimburses all through CAM).\n\nHowever it sounds like because it's a single tenant building the tenant responsible for all maintenance costs. That way you don't have to bother billing them back for a 100% pro rata. But in the future if you decide to expand or subdivide into multiple storefronts, you'd expect to manage it based on the costs above.", "replies": [], "depth": 1}, {"id": "dm3e38e", "text": "This is a gym so you'll have considerable retenanting costs if the gym leaves. Gyms typically have no credit quality (in an institutional sense) so I'd be prepared to offer recourse or pay a higher interest rate if I were you. Gyms are essentially the worst type of tenant besides a dry cleaner in the upper echelons of the CML industry. ", "replies": [], "depth": 1}]