I have studied and visited both properties as well as all competing facilities in the area and have a solid plan to increase occupancy. The properties are currently about 55% occupied and vacancy has decreased since the bank took control. My office is located within two hours of these facilities and I will manage them with one employee working on-site. I’m excited to take ownership of these properties and start increasing occupancy by marketing to a specialized segment of the local population.
The key to this deal (which makes it a secure investment) is that even if I do nothing and they operate as they have the last eight months (with little money spent on marketing by the bank), the properties will pay me back a good return. I am considering potential joint venture partners for this deal.
Commercial properties such as these do indeed fluctuate in value according to the market cycle. In cities that have been hit hard by the 2008-2010 recession, commercial property values have decreased sharply and are likely at their lowest point, as seen in the following graphs. In some cities, a slight recovery in prices is evident.
average price decreases, sales will typically increase and the number of
facilities available for sale will decrease.
That is the current situation in most
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