I have a friend selling a commercial property. I have looked at it myself last year but it went under offer and I moved on.
I cannot look at it myself given my current circumstances but someone here may be interested in finding out more about it.
I am not selling it nor have no financial interest in it. I may get a carton of beer if someone here does buy it but that is it.
I can answer general discussion thoughts and queries based on my inspection a couple of months ago but I think I will be forwarding serious enquiries direct to the vendor to answer - so if anyone is serious please email via me or call her direct.
If you do purchase it then remind her of my carton of beer
this is her email:
Dear all, I am writing to ask for your assistance in Marketing for the urgent required sale of a property I own. The previous purchaser decided not to purchase prior to Christmas, I am unsure of the reasons. If anyone is looking to invest, or knows of people who may; this is an EXCELLENT Opportunity.!$ $ $ I can’t sell the family home which still has major structural storm damage after the Newcastle Storms so am obliged to sell this investment.
Registered Lease, $800 pw + GST ($41,600p.a)
Tenant responsible for all outgoings
Lot 29/301 Hillsborough Road WARNERS BAY NSW 2282.
Copies of Lease available O’Hearn and Bilinsky Lawyers 02) 49518199.
Enquiries please reply or call 0400708978 and leave message or contact solicitors.
Contract of Sale Ready to go!
Sale price $340,000 or nearest offer.
I bought the warehouse 2 years ago for $340,000 and had a lease drawn up for the Tenant whom has occupied the property for some 10 years.
The property is 17 x 6m, with further 2 mezzanine floors.
Attractive entrance foyer/reception 6m x 6m with side access for warehouse (warehouse is end of row so accommodates better parking than surrounding warehouses/offices)
Excellent computer cable Network for several offices.
Main warehouse Area with Industrial size Roller door.
Ducted Air Con through 3 floors
I have been struggling with two mortgages and some large debts accumulated in partnership with my ex-husband, and trying to solely raise two children but am not able to sell the family home due to the storm damage from June that has structural damage to the foundations and is a huge repair job, and has still not been repaired by insurers!
Don't know a great deal about commercial property, but it looks very good on paper. Are FI's more hesitant about lending for commercial property? Do they lend a lower % of the purchase price than residential?
It seems that this buy would be well into cash flow positive territory so wheres the catch? I guess no CG over 2 years doesn't look all that attractive.
How long is the lease?
Also don't know anything about commercial property, so these may be very naive comments, but what struck me from a quick look at other commercial property advertised in the area (of which I couldn't find a great deal) is that for the size of the premises (17x6 is 102sqm), both the cost and the lease seem rather high. So while the yield is around 12%, which also seems high for the present time from what I've seen mentioned in other threads here, the figures generally seem high for the size and type of the property. If 36sqm is office/foyer, then the warehouse is only 66sqm, which to me seems pretty small (although I realise it says there are also mezz floors).
Further to hobo-jo's questions, what sort of business is the tenant into?
Also, I'm not familiar with Newcastle, but have looked on Google Earth to see where the property is, and it would appear to be at the far end of that business strip away from the bay. As you would appear to live there, and have seen the property, what are your impressions of the area as a business area, and of the property itself? Naturally if you're helping her sell the property and looking forward to a case of beer, I don't expect you to talk it down , but some general comments based on your knowledge of Newcastle would be good.
Also, if anyone else with commercial experience would like to comment on my first paragraph above, does that seem like a reasonable comment or am I totally missing the plot?
Simon, I spoke to the vendor last night and could answer some of these questions. Would it be a breach of confidence to make some facts known?
Sunfish - go for your life mate. I just met her the once and am hardly biased towards her.
Hillsborough Rd is quite a growth area and full of Home Maker style shops. Tile warehouses, bathroom fittings, pools, furniture etc etc We visit there often and it is a high traffic road. I first looked at this property precisely because of the location.
The tenant is into the repair and servicing of medical equipment. I think he may also supply it. There is a classroom on a mezz floor where they do first aid trg and other courses.
The workshop has gas ducting to supply medical gases for the equipment.
It seems very large inside with the full mezz floors.
I am not trying to sell this - I just posted it as a favour for a nice lady. Giot to remember I am single now .....
Hey I like your style!
Early on, someone asked about LVRs and it is normal to lend only 60% on commercial.
The $800/w lease is a contrived rental derived as a part of a separation agreement. In two years when the lease expires it will revert to "market" rents which may be closer to $500/w (today's rates).
It sounds as if the building is 3 floors (not sure of the diff between a mezzanine and a floor) so the rentable area is more than you would think.
I hope that posting this will answer some questions, which will be in Suzanne's interest.
not sure of the diff between a mezzanine and a floorClick to expand...A mezzanine floor is a partial floor between main floors, typically looking like a balcony around the edges.
Do you have the owners email, as we would like to contact her directly.
email me and i will reply with her address