ok so i may have an amazing deal handed to me...

my best friends dad owns two commercial buildings,...one is restaurant, with apts on top of it, and the other is 25 unit apartment complex....

now i have not the slightest information on how to comp these things...mls only had one listing in the entire zip...

my broker told me to look at loopnet.com...

so im doing that right now....

now the first deal with the restaurant should be an open and shut case, as my buddies dad has a price in mind, and the guy that is leasing hte restaurant agreed to it, and is planning to buy soon....

however of course i want to do a cma for it...

the other he asked me for pricing as he is thinking of selling...

any advice would be greatly appreciated, commercial is always an area i wanted to break into, and this lucky break may be it....

is there a seperate commercial board i should join? pm or posts are greatly appreciated all.

: )

If you find out, please let me know, as I have a similar situation going on...a ten-unit apartment/office space building that I actually sold a little over a year ago. Buyers now want to sell it. The only sale I can find in the past year is a restaurant with apartment space upstairs. Loopnet came up with two active sales of good comparable properties, but asking price is not selling price, as we all know. Both the active comps have been owned short-time by the sellers and their asking prices are WAY more than they purchased them for. (Think, purchased two years ago for $85,000, now for sale for $499,000). I only have the free intro subscription to Loopnet, and for the limited amount of commercial I do, the full subscription price isn't justified.

you are dealing with income producing properties. Unless being sold for redevelopment, etc., the value of these parcels is going to be tied to the income generation of the leases and/or upside potential if rents are below market rate. First step is to determine what his NOI is (Net Opperating Income). Google that phrase and you'll see how to calculate it. Basically...you need to determine his total income created for each property AFTER expenses.

I would highly suggest you team up with a commercial broker or agent on these properties. Selling income producing properties is very different than residential and it is easy to feel well over your head very quickly if you don't understand the basic principals.

thanks for the info...i have brushed up on the basics such as grm, noi, etc....

however when comping commercial properties what is acceptable as far as variations in the parameters?

for example for residential cmas the standard is usual with in 20% living sf, sales within 6 months, within 1 mile radius...

i know commercial valuation is a great deal of market research but typically what parameters should i make a concerted effort to stay inside of?

Maybe instead of brushing up on the basics you should partner with an experienced commercial agent and learn from him. There is no general rule since market conditions in your area will drive the value. You are not doing your client any favors on that 25 unit apt building by representing him with out sufficient knowledge to do so.
If you have an interest in commercial take the intro CCIM class. Do not "practice" on a client!

i understand , but i am just doing my own research right now, that deal is not happening anytime soon, if that makes any sense, i have plans to take a class and continue learning on my own, and am actually applying to a masters program in commercial real estate at USC, my office is small and there are no commercial agents readily available to me ....

i do have one acquaintance that does commercial, not sure how helpful he will be though...trust me i understand where you are coming from, and if i was listing a property right now and advising a client, i would be in way over my head, but my questions are more related to simply educating myself and getting myself use to commercial properties in a safe way...ie pulling comps and doing commercial cmas for myself, simply for practice and so that i can get my feet wet...


: )

Just keep trying and learning.I hooked up with developers in commercial and have learned a lifetime already in just 2 years time of doing deals.The experience they have that can be passed on is not taught in theoretical schoolbooks.

Beleive me you have teachers in schools saying this and that BUT you have developers on the ground doing deals with real world experience.You have to look at the apartment as said based on income but the property might could be reingineered or changed into something else completely.

Commercial is so vast it is amazing.

Companies are CLEANING UP buying assetts that corporations are dumping.Here is an example 25 Home Depot greenhouse stores were purchased for 25 million.Home Depot dumped them because they closed the stores down and the Ga drought.Most of these stores had 10 acres to them.

Can you imagine getting land in prime locations for 100k an acre that is already CLEARED,HAS UTILITIES AND SEWER,AND HAS BEEN GRADED AND CONSTRUCTED!!

Amazing deals out there!Commercial gets my blood pumping just thinking about the opportunities.

....apartment complex will need a cap rate for your buyers.

Theres software out there too that can help you.

....apartment complex will need a cap rate for your buyers.

Theres software out there too that can help you.

oh and read your [censored] off

Its funny I havent done a commercial deal yet but was holding good conversation with the CCIM guys at a recent seminar. At least be able to talk the talk...you can't get anyone to help you with that, but you can get someone to help you with walking the walk.

For commercial you can go back 2 years for sales and a 50 mile radious.

How many folks do commercial valuations?? Is it worth it? What is the hardest part? I've done a few, just looking for ways to make them easier...