Wednesday, December 19, 2012

Single Tenant NNN Corporate Lease 10+ years Southern California for Sale!

7-11 signed corporate lease store plus gas station available for sale in a most-southern California location at the US-Mexico border.

$2,200,000 purchase price for a 5.45% cap rate absolute NNN investment property with a new 10 year lease + 15 years in options. The 7-11 corporation has over 8,000 locations in the US and a AA- S&P rating!  Internationally 7-11 operates another 40,000+ stores in a variety of countries. The subject property location boasts high vehicle traffic counts and excellent exposure to the main expressway.

This is a very good 1031 exchange property or a solid investment option to consider in comparison to "secure" investments.  Call for details.

Monday, December 3, 2012

Single Tenant NNN for Sale in Orange County

Corporate signature single tenant NNN investment property for sale in Huntington Beach, CA Orange County.

10 year new lease renewal for a well known 80+ location casual dining restaurant in a major power center off the 405 freeway in Orange County.

This 5.5% cap rate, 10 year lease is a solid investment property with low landlord responsibilities. For a commercial property which has highway visibility off off the 405 and situated in a shopping center with the likes of Costco, Macys and more, this property will have strong appeal for years to come.  Excellent vehicle for a tax-deferred 1031 exchange or as a straight investment property to add to your portfolio.

The straight numbers are: $5,235,000 purchase price. $287,693 net operating income per year. If this is an all-cash purchase then it is a 5.5% rate of return.  This is an excellent rate of return when compared to other investment options.  In addition, tax depreciation is taken on the income received for a better after tax rate of return.

When financed with 65% leverage, the rete of return increases significantly.

Further things to consider: Southwest Airlines from San Jose or San Francisco to LAX round trip range from $140 - $225 and takes about 1 hour flying time.  Investment properties within your state of residence do not require an out of state tax filing. 

Call for more details.

Tuesday, November 27, 2012

Don't Wait to Buy Real Estate!

The old adage, "Don't wait to buy real estate, buy real estate and wait" is very true today as it was when it was first spoken by the great guru of real estate Donald Trump (actually probably not him, maybe Warren Buffett, or perhaps it was Joe Blow - this part is not relevant!)

There are a crazy number of private equity funds, family trusts with lots of cash, hedge funds and single investors in the marketplace looking for that bank owned, 12% cap rate deal in the best of the best neighborhoods with stable cash flow and a corporate 10+ year lease. This asset does not define the word "distressed".  It is also non existant.

What is available are stabalized apartment deals with 6% cap rates in decent neighborhoods that you can finance with 4% money. Positive leverage all over those numbers.

Also, think about 1031 exchanges of high equity properties that have a low rate of return.  Get that equity working again. A single family home rental with a 3% cap rate can be sold and traded into the 6% cap rate apartment building just mentioned.  You get more tax sheltering with additional depreciation and added leverage too.

And in non-residential investments:

1. Single Tenant NNN deals with strong tenants and 6%+ cap rates
2. Neighborhood strip centers with 7% cap rates - this add diversity of tenants and invests in stable mom and pop businesses that tend to stay well occupied.
3. Do you own a business?  Time to use amazing SBA financing and buy your own space.
4. And there are more - talk to us about all the options.

The actual topic of this post is this: It never seems like an amazing deal today.  Next year you will look back and be very happy.

Let's talk options now.

Friday, October 26, 2012

West Los Angeles Class A Office Building for Sale

Multi Tenant almost fully occupied office building for sale in prime West Los Angeles location. This nearly 100,000 square foot modern office property has been very well maintained and upgraded through the years.  Excellent street visibility, great parking, stone and glass exterior and a loyal tenant occupancy. Financing rates will allow for positive leverage on this class A office building. Excellent 1031 tax deferred exchange replacement property.  Pride of ownership asset. Call for details.

Friday, September 14, 2012

To Pay a Point or Not to Pay a Point?

Should a home loan borrower pay an additional point - think 1% of the loan amount - to lower the rate of the loan over its amortization period? The answer is: maybe....

The answer is in the arithmetic and what you think of the future.

First - if you pay an additional point - how much will the loan interest rate and the loan payment decrease of the life of the loan?  And what is the recoup time to cover the point?  If your loan payment goes down by $50 per month on a $100,000 loan and it costs you $1,000 to get this reduction - then the recoup time is 20 months.  So, on a strictly numerical basis, if you keep the loan for more than 20 months, then the payment of the $1,000 is well worth it.  If you happen to sell the home or refinance the loan before 20 months, then you have not achieved a full benefit of paying the point.

Second - What is interest rates move lower and you want to refinance to get a better rate.  Your break even point is now $1,000 further away.  This is neither good nor bad - just an issue of checking the arithmetic again.

And finally - who ever holds their loan for 30 years??? OK - that was a separate issue, but one that should be considered when thinking Rate, Term and Points.

For more info on lending:

Friday, August 31, 2012

Palm Spring Area Single Tenant NNN Investment Property for Sale

An outstanding opportunity to acquire a single tenant NNN investment property with stable cash flow and a unique business model is available in the Palm Springs area. This premier restaurant chain with a loyal international following has a 15 year lease with annual increases. The business is owned by a 1500+ location restaurant corporation that knows how to operate successful enterprises. 6% cap rate on a  <$5M purchase price. Consider this - $292,000 net operating income per year for a rock solid asset that will increase in cash flow yearly based on CPI. For someone looking for a stable asset within a short flight of the San Francisco Bay Area, this is ideal. Perfect vehicle for a 1031 tax-deferred exchange. Call for details on this or other NNN investment properties throughout the Golden State.

Monday, August 20, 2012

Office Investments for Sale in California

The MPIRES group is tracking a handful of excellent investment properties for sale:

1. West Los Angeles: 94,500 square foot building, 96% occupied by professional office tenants and medical tenants. 1990's construction, class A glass building with an excellent address and street exposure. 6% cap rate at $27,000,000.  This is a solid investment property with future rent growth in a strong market.

2. North San Francisco Bay Area: 100,000 square foot single tenant medical building. 6.75% cap rate. Highly rated credit tenant in place. Long term lease. Modern building in growth location. $21,000,000.

3. West Los Angeles: single tenant NNN investment property with highly rated credit medical tenant. 6.5% cap rate, $14,000,000 price.

All three opportunities represent solid 1031 exchange replacement properties. With apartment building cap rates selling in the 4-5% range, these properties provide an exchanger with higher cash flow, lower management and modern buildings. 

Tuesday, August 14, 2012

Put Your Property in a Trust!

In many cases, a trust is the better way to hold real estate for tax benefits and probate avoidance. We just had an elderly client move her property into a trust so that the aforementioned benefits can be achieved.  With the right tax planning - and rest assured that I am NOT an expert in this at all - your heirs can receive far more than what would be left them if no planning is involved.  Also, aside from tax liability, is the issue of when control over a property will occur.  If a property - such as your rental fourplex - needs to go through the probate process, who will manage it and the tenants? Can a mismanaged building deteriorate in value over a few months?  Yes, of course this is true. Trust planning, insurance, checking your loan costs, preventative property maintenance - these may not be fun parts of owning an investment property - but they yield great benefits when done correctly. Your internal rate of return relies heavily on these important aspects of ownership. Call me for great professional recommendations to experts in any of these areas.

Monday, July 23, 2012

5 Unit Apartment Building Cupertino Monta Vista Just Sold!

The MPIRES group just finished representing a buyer on a beautiful 5 unit apartment building in the foothills of Cupertino's Monta Vista area.  Our client was finishing a 1031 tax-deferred exchange from an investment property that they owned in the Central Valley.  This exchange yielded them less management, stable cash flow in a fully occupied building and good rent upside as rents continue to climb in central Silicon Valley. The property was located off of Foothill Expressway on Alpine Road.  Each of the units had private balconies or backyards and some with excellent valley views. The outstanding school system in the area is a huge draw for tenants and a driver of solid rental rates.

Friday, May 4, 2012

Bank Owned Industrial Commercial Condos Santa Clara for Sale

Selling now are 7 bank owned industrial condos in Santa Clara. Sizes range from 1,440 square feet to 2,930 square feet.  Larger spaces can be made by combining adjoining units. All have roll up doors and some office build out (typically 10% office). Pricing is attractive at approximately $135 per foot for some units.  10% down SBA financing is possible for units occupied by owner-users.  Interest rates for SBA are also very attractive now.  If you want to own your own commercial space, this is the time and Santa Clara is a great city in which to own!

Thursday, April 26, 2012

58 unit Apartment Building Just Listed for Sale in Mountain View!

A beautiful and well-located 58 unit apartment building just hit the market for sale in one of the best Bay Area cities. A mix of studios and 1 bedroom units in a courtyard setting with buildings wrapped around a common pool area. Very good location across the street from the Safeway shopping center at Shoreline & Middlefield Road in Mountain View. Offered at 13x gross current rents and a price of $12,650,000.  This is a rare offering of a trophy location asset in the heart of Silicon Valley.  Call for details and a detailed broker package.

Tuesday, April 24, 2012

Single Tenant Bank NNN LA County for Sale

We are tracking a just-listed single tenant NNN investment property of a bank in Los Angeles County that looks very attractive.  5.5% cap rate, 8 years remaining on a 10 year lease, two 10 year options to renew, COLA (cost of living increases) of 3% - 5% per year!, $2,695,000.  The price is very good for such a high quality and well-located single tenant NNN deal with a corporate signature. Excellent 1031 tax-deferred exchange property.  Many multi-family apartment owners are reaping high sales prices for their 50 year old rental properties and exchanging into solid commercial assets such as this for excellent cash flow and more tax-depreciation write offs. Call the MPIRES group for more details soon.

Thursday, April 19, 2012

Why Buy a NNN Drug Store commercial investment?

So this may sound a little like a rant and it very well may be!

Let me start with the statement that NNN investments are great commercial investment properties for the right individuals at the right time.  Many buyers want the best location, best quality - read corporate guarantee, longest remaining lease term, highest cap rate, newest building, etc for their NNN investment property purchase.  The cream of the crop in this list of "must haves" tends to be the drug stores (CVS, Walgreens, Eckert). Almost all of these - especially the new construction ones - have 25 year leases, corporate signatures, and cap rates that are better than most mom & pop strip centers or the typical Burger King NNN deal.
So, what is wrong with that???

The 25 year lease tends to be flat for 25 years.  No increases in rent.  Price paid for an investment property tends to be the Net Operating Income divided by the prevailing cap rate.  NNN assets increase in value as the NOI does with rent increases or with new tenants paying market rents.  In a flat lease example: at time of purchase - $3,000,000 purchase price, NOI of $210,000 per year, 7% cap rate. 10 years later, that asset still has $210,000 of NOI at a prevailing cap rate of 7%, then the value is still $3,000,000.  20 years later, same value because of same NOI - $3,000,000.  The $210,000 per year income is wonderful, yet the value of the property has stayed flat.  If you bought any other traditional real estate investment - such as a single family home or an apartment building, the assumption is appreciation over 10 years or 20 years.

Also, consider that the buying power of $210,000 today is far greater than what it will be in 20 years.  Do you remember what $1,000 felt like 20 years ago?  It barely lasts one day in Las Vegas these days - sorry for the personal reference!

Stability! - One reason why drug store investments have been so much in demand is their extremely low rate of default.  Many drug stores are sold based on the number of prescriptions held by the store - 1,500 is OK, 1,800 is good, over 2,000 is excellent. These patients that return to the store every month will buy additional items as they make their way to the exit.

And then there is Technology... "Curiosity killed the cat" should be translated to "Technology killed the retail investment".  I just drove past a billboard touting a new app for ordering prescription drugs from your iPhone. If FedEx will deliver your prescriptions to your mailbox with the click of a  mouse, then what will happen to those tempting bags of chips displayed on the drug stores shelves? I will let you connect the dots.

And don't get me started on land lease drug store NNNs!

Let's talk about why I like local, multi-tenant strip centers occupied by bakeries, nail salons, sandwich shops, dry cleaners and convenience stores. These un-corporate signature deals have stability, upside and are protected from technology killers. As said many times before, as healthy as our county gets, we will always want to buy a burger - said burger cannot be FedExed - yet!

Monday, March 26, 2012

Commercial REO Hayward & Commercial REO San Jose

Two commercial REO deals in the Bay Area for sale:

Coming soon for sale in Hayward is a bank owned commercial 6,400 square foot automotive facility.  Well located on a major thoroughfare in Hayward and on a hard corner.  Clean building perfect for an investor or owner occupant. Call for details prior to the property going on the market.  This is a great opportunity to buy a bank owned commercial property in Hayward. Pricing in the $600,000 range.

Available now - San Jose single tenant restaurant building with good parking in the Rose Garden for sale. This is a good deal for an investor, as the tenant is in place and would most likely stay.  The business has been in operation for over 30 years! Will be priced in the $475,000 range.

Call Mario Pinedo 415-269-6249 for details.

Friday, March 9, 2012

Home inventory way low in Silicon Valley

As of today - for the county:

1453 active detached homes
406 active condo/THs

477 sales detached homes
145 sales condo/THs

Very little to choose from even though we are fast approaching the Spring historical inventory peak.

Sunday, March 4, 2012

PUD Real Time Investment Numbers

The MPIRES group just ran an analysis on a PUD in the hot Santana Row rental area for an investor client.  Here are the numbers, what do you think?

Purchase price $475,000 (short sale)
3 bedrooms, 2.5 baths, 1500 square feet, 2 car attached garage, $115 HOA dues.
The home is 8 year old and looks great.
Rent comp in complex achieved in November - same model - $2700 per month!
 4% financing
$196,000 down payment
2.6% cash on cash return year 1
8.67% IRR per year average before tax on a 10 year hold.
6.96% IRR after tax on a 10 year hold.

Great, solid asset in a hot rental area.  Our projection of sales price in year 10 is based on a same Cap Rate as the purchase price Cap Rate. We feel the market will have a lower Cap Rate in 10 years which will dramatically increase the rate of return.

We know other great short sales, REOs and well-priced equity sales throughout Silicon Valley for investors - call us today!

Friday, February 17, 2012

2 Tenant Bay Area NNN for Sale

Corporate leased NNN investment property for sale in Antioch.  $4,1550,000 at a 7% cap rate.  Approximately $1,500,000 down payment needed to match current attractive existing fixed rate financing. Well positioned pad in a grocery and drug store anchored neighborhood center. This is a solid investment property in the Bay Area with good long-term prospects.  If you look at NNN investment throughout California - single tenant, decent leases, known tenants - cap rates are 6% -  6.5%.  This is a Bay Area NNN investment property with good tenants at a 7% asking rate. I like this deal - call for details.

Friday, February 3, 2012

Commercial Condo for Sale Silver Creek Evergreen San Jose

Attention business owners: this is an excellent opportunity to own your own space for an office or warehouse near Silver Creek Valley Country Club. 1,500 square feet of shell condition space for an attractive price of $175,000. Commercial financing rates are very attractive especially for owner-user space through the SBA program.

Wednesday, January 4, 2012

Bank Owned Commercial Car Care REO for Sale in Hayward

Coming soon for sale in Hayward is a bank owned commercial 6,400 square foot automotive facility.  Well located on a major thoroughfare in Hayward and on a hard corner.  Clean building perfect for an investor or owner occupant. Call for details prior to the property going on the market.  This is a great opportunity to buy a bank owned commercial property in Hayward.

Tuesday, January 3, 2012

Santana Row Facing Condo Loft for Short Sale!

Coming soon is a wonderful condition Santana Row condo loft that overlooks the Row as a short sale.  Very good value for one of the best "B" floorplans.  And... the best parking option offered!  If you have a car that you love, you will really love the parking that comes with this unit. Call me for details on this excellent Santana Row condo opportunity,