931-932 NE 24th Lane, Cape Coral, FL 33990
Property Overview:
932 NE 24th is located in the same business park as 830 NE 24th Lane, Cape Coral, Florida 33909 and 2621 NE 9th Avenue Cape Coral, FL, 33990.
This part of Cape Coral expanded strongly coming into the Global Financial Crisis, but then stopped dead in its tracks. New construction has re-emerged though and the business park has few vacancies.
The property was purchased as a short sale from the developer, and during due diligence he mentioned that he had spent $1,700,000 in constructing the property. Our purchase price was $480,000 or $34.29 per square foot is a substantial discount, both to the reported construction cost and also the $1,120,000 replacement value for insurance purposes.
There is a single building on the site, which is split into 14 tenant spaces of 1,000 square foot. Each tenant space has an office and a bathroom, with access via a roller door (to warehouse) and glass door (to office).
As it was acquired as a distressed property there will be a period of stabilization which may see some tenants leave causing a spike in vacancy. This is expected to last less than six months as current demand for this sort of commercial property is very strong.
The yield at purchase is unknown as the vendor / bank were unable to provide reliable reports.
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.
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Acquisition date |
29 September 2014 |
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Contract purchase price |
$480,000 |
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Original listed price |
$495,000 |
|
Discount to listing price |
$15,000 |
|
Independently appraised price |
$540,000 |
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Estimated insurance replacement cost |
$1,120,000 |
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Occupancy at purchase date |
Unknown |
Appraisal date and appraiser |
13 August 2014 |
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Finance terms |
All cash |
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Gross Building Area |
14,000 sq ft (1,300 sq mtrs) |
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Land size |
46,936 sq ft (4,360 sq mtrs) |
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At purchase estimated net operating income |
Unknown |
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At purchase estimated cap rate |
Unknown |
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At purchase estimated cash on cash return |
Unknown |
Further Notes:
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.
Aerial Picture:
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. |
