Price Based On Gross Potential Income Or Current Occupancy?
I am looknig at a high rise office building for sale. I have not purchased commercial property before but have been in the business of multifamily for over 8 years now.
The asking price for a property is generally based on the cap rate of the NOI but do you get the NOI from the POTENTIAL annual income or the ACTUAL annual income.
In other words is it acceptable for the owner to base the price on what it could get at full occupancy (minus 5-10%) or should it be based on actual occupancy. In the case of this bldg, it is 75% occupied.
I would imagine the lender would require actual.
What is the normal practice?
Thanks in advance!!
-Tony
[ Edited by tony17112acst on Date 10/16/2006 ]
Instead of vending machines or video games, try to devote a corner of the space to a hot coffee/pastry cart. It will give your customers something to look forward to.
Try to get some commercial accounts from local restaurants, and motels... keep those machines going 24/7
you can also get good info from www.coinwash.com
we were looking at a building that was a mixed use with a laundromat in ohio but the revenue is too small for us to hire a manager for the mat which it would need. Considered having an entrepenure use the place to do wash dry and fold at and they could keep the money they make for their services.