From the course: Introduction to Commercial Real Estate Analysis
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Simple office case study
From the course: Introduction to Commercial Real Estate Analysis
Simple office case study
- [Instructor] All right, we're going to look at our first office example. This is going to be a simple office. It's a small multi-unit office building in the suburbs. And it is about a purchase and stabilization of this small neighborhood multi-unit office building. Now, 50% of it is leased on a square foot basis but needs remodeling. So this is more of a value-added play. All right, some other specifications. It's 12 units, three units leased, nine vacant. So three out of nine vacant, but the three that are leased make up 50% of the square footage. Market rents, about a buck 65 to 2.50 triple net. And we're looking at 12,000 square feet of total space that ranges from 300 to 3,000 square feet per tenant. Okay, some other economics for this deal is that total project cost is 4.5% cap rate on the existing income. We're going to spend $30 per square foot in renovations to upgrade the empty spaces a little bit to get tenants in there. And looking at 12 months to lease up the remaining…
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