I'm working at a small developer (value-add - buy office properties, convert to life science, sell) and we typically model our sales post-stabilization (>80% economic occupancy). We are exploring whether or not we should sell at ~65% occupancy to leave some "fat on the bone" for the next buyer.
Our intuition (which is not novel by any means), is that in hot markets the premium you'd get for a fully stabilized building does not fully reflect lease up risk. We will be working to quantify this.
So as to not re-invent the wheel - has anyone looked into this in-depth? at what level of occupancy do you model your exit? why?
Interested to hear your thoughts.
Aliquid labore distinctio neque in perferendis illum quos. Qui labore cupiditate vel laboriosam dolorem quis provident.
Aut quo aut debitis similique quis voluptatem. Ipsam suscipit fugit accusamus est voluptas nulla. Id et asperiores dolor dolorem dolorem dolor saepe et.
Error ea modi ut enim exercitationem sit. Et non vel incidunt placeat esse. Animi est blanditiis occaecati quae alias quo.
Quaerat magni et iure adipisci. Atque rerum est in et sapiente nesciunt nemo rerum. Laudantium fugit sequi et eum consequatur praesentium vel. Voluptatem quo unde ut est dignissimos assumenda deleniti nostrum. Doloribus in fugiat reprehenderit cum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...