2621 NE 9th Avenue Cape Coral, FL, 33909
As the Florida property market continues to improve, it is becoming harder and harder to find industrial commercial property at less than $40 per square foot.
When properties are found, the yields are a little on the low side as prices have risen however existing rents under inherited leases are often lower than current market as they were negotiated in less optimistic economic times.
This property fits this profile well. At $36.11 per square foot it represents value buying, yet the at-acquisition yield is only 7.44%. If rents on renewal are able to be reset to market the yield is forecast to increase to 10.55%.
Positioned on 1.39 acres of land, there are three x 6,000 square foot multi-tenant industrial buildings (total 18,000 square feet) constructed in 2005/2006.
The property is expected to provide immediate cash flow as it is 100% leased as at purchase date. It is in the same industrial park as 932 NE 24th Lane &830 NE 24th Lane.
Property / Financial Information:
Disclaimer: Information provided about forecast annual net cash flow and cash on cash returns are derived from unaudited financial projections. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Responsible Entity. The Responsible Entity cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.
Appraisal date and appraiser28 May 2014
Diversified Appraisal, Inc.
|Acquisition date||27 June 2014|
|Contract purchase price||$650,000|
|Original listed price||$699,000|
|Discount to listing price||$49,000|
|Independently appraised price||$700,000|
|Estimated insurance replacement cost||$1,170,000|
|Occupancy at purchase date||100%|
|Finance terms||All cash|
|Gross Building Area||18,000 sq ft (1,672 sq mtrs)|
|Land size||60,632 sq ft (5,632 sq mtrs)|
|At purchase estimated net operating income||$49,823|
|At purchase estimated cap rate||7.44%|
|At purchase estimated cash on cash return||7.44%|
Currency: All numbers are shown in USD. Returns shown have not been translated into Australian dollars as the exchange rate varies. A AUD:USD exchange rate below AUD1:USD1 will increase the percentage return. A AUD:USD exchange rate in excess of AUD1:USD1 will decrease the return.
Management costs: Returns shown above include US management costs, but exclude the management fee charged by the Responsible Entity (1.98% per annum of Gross Assets).
Returns: Returns prior to the property being stabilized are expected to be lower than those forecast above as once off due diligence costs are absorbed, and as less income is received from vacancies as at purchase date. Unless otherwise noted, properties are expected to be stabilized within 12 months of acquisition.
More information on key terms:
|Estimated insurance replacement cost:||The estimated cost to rebuild the property in the event of a total loss. The number is calculated via discussions with a independent insurance broker and considers the age and construction type / quality of the building.|
|Net operating income:||Operating income – operating expenses|
|Capitalization rate:||(Net operating income ÷ Purchase price) × 100|
|Cash on Cash return:||(Annual cash back ÷ Cash down) × 100|
|At purchase capitalization rate:||Using unaudited management forecasts, the estimated capitalization rate at purchase date.|
|At purchase cash on cash return:||Using unaudited management forecasts, the estimated cash on cash return at purchase date.|