How To Conduct DD and Manage Personal Industrial Investment
Anybody here invest in small industrial properties on their own? I'm looking into a single tenant NNN warehouse near a downtown core, currently leased and used as a "last mile deliver" facility for a large retailer. My questions are:
> If the lease is NNN, does all rent truly flow directly to NOI since all opex is reimbursed? Or are there other opex the LL must pay? Specifically curious if a large re-assessment could trigger LL to pay some of the new tax bills.
> What should I be most aware of when inspecting the physical layout/construction of the property? I'm bringing an inspector who can spot standard stuff like signs of leaks/mold, faulty plumbing/wiring and outdated mechanicals etc... but what about things more industrial specific like "clear height" or # of bay doors per SF or other metrics I should look for?
> What are the most important things to check the lease for?
> What does self managing a small NNN warehouse entail? I'm assuming its a mostly just monthly bookkeeping to keep track of CAM charges/reconciliations and then working on renewals/new leases & TI when a lease rolls. Sounds pretty hands off relative to multifamily.
I am posting from the app and for some reason I cannot see the date of your post. Assuming it is recent, I am very interested in the same topic. Especially since it is single tenant. Always seems risky. Did you pull the trigger? Depending on the age of this post I can try and shed some light.
Interested in others’ answers. I don’t think rent truly flows through because you have to account for vacancy + management fee (the banks will jot each of those at 3-5% and draw it from your gross annual rent as an expense when giving you an economic market value to lend to you for the MTG.
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