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Podcast: The Commercial Real Estate Investor Podcast
Episode: Backing Into an Offer Price on Vacant Commercial Property | Office Hours
Description: Key Takeaways:Vacant properties still have value – you must underwrite future income and back into what you can pay today; don’t let brokers sell you tomorrow’s value at today’s price.Start with market rent per square foot – use similar properties, OM data, LoopNet/Crexi, and broker conversations to estimate realistic market rent, then compute gross income and NOI (after vacancy and operating expenses).Use NOI and a market cap rate to get stabilized value – value = NOI ÷ cap rate; track offering memorandums in your market to understand realistic cap rates for different ass...