What would I do? 🤔
I watched all 3 videos because I'm a real estate junkie/geek/lifer 😄 . The teams did a great job and I was impressed with several things, one being that they captured cap rate volatility in the different scenarios.
As a big box leasing guy, I'm lucky to have worked on hundreds of projects like this. So I would ask the following questions:
- Is there enough frontage to split the box? A 58K box is at least 200' deep, which means frontage is 290' maximum. A 25K operator needs about 140' which means you could split it in half, but not 3rds. This is especially true since the box is not an endcap, and therefore all egress will have to go out the back.
- Is there enough TI for splitting the box? This can add $20-$50/sf on top of renovation costs
- Is there enough TI for the entertainment tenants? 1 presentation had only $50/sf. Many of these operators are asking for $100-$300/sf. Good news is that they could proforma more rent than what I saw in that presentation
- Is there enough parking? 1 presentation said 550 spaces, which is only 4.3 spaces per 1,000 sf. Most nationals want a minimum of 5 per 1,000 sf. Will the new building pad reduce the total?
- Will LA Fitness and Ross restrict several of the uses mentioned? storage (non-retail), entertainment (parking hogs), pickle ball (exclusive violation)
- Will the new building on the pad affect site lines, parking ratios, and/or be in a restricted area?
I'm usually brought in after the acquisition people have created their assumptions and proformas. Sometimes too early and sometimes too late 😉
Congrats to the teams from Temple University, Rutgers University–New Brunswick & University of Wisconsin-Madison!
#bigboxleasing #retailleasing #icsc #NewYorkICSC
Industrial Properties Sales and leasing. Pinnacle Realty of New York, LLC
3wCongratulations