Wanna buy a warehouse?
April 15, 2010 1:51 PM Subscribe
What information do I need to have at my fingertips to profitably negotiate the sale of a commercial rental property? Or should I even do it?
posted by anonymous to Work & Money (8 answers total)
I have been handling my mother's affairs since age and infirmity have left her unable to do so.
My mother owns a small warehouse and office complex used as a trucking terminal by a shipping company. It's a large bay in a steel-frame building with a 5-ton box crane so drivers can redistribute loads and park their rigs indoors, and a loft area with a kitchenette, bathroom, and bunk for them to freshen up and catch some sleep. There are two offices downstairs used for training and meetings and paperwork. The tenant is great. They've been with us for more than a decade and they've always paid on time, never made unreasonable requests, and have always been a pleasure to deal with.
Today I got a call from the president of the truck line that rents the warehouse. He wants to meet with me next week. I'm certain he wants to make an offer to buy the place. This is timely, as my mother's savings are dwindling due to the cost of her care.
The property is in a bad neighborhood, but it is fenced in and reasonably secure. There is a slow-moving roadworks project that will run almost right in front of the building when the roads are finished (2015? 2017? Next Wednesday? Never? Who knows?), potentially giving us frontage access to a major throughway.
This property generates my mother's only income, about $40,000/yr. There is no mortgage on it: we own it outright with zero debt. I know the appraised value, because I just paid the property taxes on it, and it's not appraised for as much as my description might lead you to believe. Should I even sell it? Should I wait until the roadwork is finished, hoping for a spike in property values? I don't want to alienate my tenant -- but they've also been there so long that I don't think they'd consider picking up and moving.
Do I need to retain an attorney? Consult a commercial real estate agent? Do nothing and say it's not for sale?
I really don't know what to do here. Please hope me!
(Posted anonymously to keep family financial matters private.)