Friday, July 27, 2007
I just taught a real estate practices class at De Anza College and the above example came up. On the corner of Stelling and Stevens Creek Blvd in Cupertino there stood a Warehouse Records store of approximately 5,000 sqft. Nice hard corner, great demographics. Unfortunately for the owner Warehouse succumbed to technology and declared bankruptcy. The building owner then tried in vain to lease the space to another tenant although no one was biting on the 5,000 square feet. Along came an investor group that offered to buy the building for approximately $200 per foot. She agreed to the sale. They then demised the space into three and brought in Starbucks, Panda Express and Verizon. Then were able to sell the building for approximately $700 per foot within a year. Nice profit! Lesson to be learned - hire competent Realtors to advise you on what your best strategy is. In my humble opinion!