What about commercial property?
12 Grigg Street, just off of Greenwich Avenue, is listed for $2.495 million. It's on 0.10 of an acre and has two parking spots. I don't know much about commercial real estate in Greenwich (other than that the big guys insist on being directly on the Avenue - they don't do "around the corner") but this seems high to me. I'll watch its progress and we can learn together.
Posts
11 comments:
I - for one - don't know much about 'Commercial Property' either -however- 'Marshall Heaven'- if he is still a-round use to be on top of this market - he always had some interesting comments regarding Greenwich Ave. -
well - 'The Top Dogs' love Greenwich, Ct. so may-be the asking prices could be fair - on the other hand - in todays market-
who knows? Yes - Chris - keep us posted - interesting!
For commercial, it is all about the income. Take the net operating income and divide it by a cap rate of say 6.5% and you get a price. So for example, if the place has net income of $162,000 per year (assume 1600 sf times 100 psf in net rent) and divide by your cap rate, you get to the $2.5m. I know nothing about this property at all, I was simply illustrating that commercial properties are valued somewhat likes bonds, basically on how much yield they produce. In a strong retail market like Greenwich, it is safe to assume a 6.5% yield on your investment. Using a different approach to value, you can look at similar properties and see what cap rates those have traded at recently to see if your 6.5% makes sense.
Marshall Heaven was once the retail guy in Greenwich but as large retailers have moved in, so have the large sophisticated firms like CBRE, C&W, etc so he is less relevant these days.
Hmmm - makes sense to me.
Very interesting and informative - Thank You!
Chris, your response to my posting about commercial real estate valuation seems tinged with derision. The fact is that commercial property is actually valued accorindg to widely accepted investment metrics shouldn't be beyond your grasp. In the commercial real estate world, more goes into valuation than price psf and sale comps. Perhaps a little valuation discipline in the residential world would go a long way to bringing values into line but that is probably over the heads (and beyond the interest) of most residential brokers.
you misinterpreted my response. I am interested, in fact I've been playing with your cap rate and applying it to certain single family houses that are currently for sale. I'll have more on this tomorrow but they seem to be yielding a 3.5% return at best. Of course, if you can hope for a good appreciation when the market rebounds, that might be ok. But thanks, and sorry you thought I didn't value your insight.
Thanks for mentioning me, "anonymous" guys. As far as "large, sophisticated" firms, more often than not they are not versed nor vested in long term Greenwich commercial real estate. Whomever the novice commercial real estate agent was that posted at 1:47 pm., please don't knock this thirty year professional, as your anonymous cap rate "analysis 101" isn't germane. Properties like these are in short supply and are bought based upon need and location.
If you are a customer looking to buy, sell or lease commercial real estate, please call me on my cell @ 203-561-7023. Thanks, Marshall Heaven
I was out this evening and didn't have a chance to correct "anonymous" but Marshall Heaven is very much still the best commercial real estate broker in the area and a long way from being irelevant. To the contrary, he'd be the first guy I'd go to if I were looking to buy or sell a comercial property.
but isn't the question here whether or not $100 rents are achieveable? i have no idea, bueller?
cos cobber
Marshall, I said you were less relevant, not irrelevant. The large national retailers want to deal with the big firms because of existing relationships, that is just the way it goes. Local players like you have long-standing relationships which keep you firmly entrenched in the game but I have noticed a lot more GVA and other large brokers signs around town lately. Just a sign of the times.
MORE IMPORTANTLY, if you think for a moment that cap rate analysis and yield metrics are "not germane" then you are just plain wrong and part of the system that helps perpetuate ridiculous pricing....something Chris hammers away at every day on this site. You are a dinosaur if you think commercial properties are purchased solely upon "need and location". Everyone likes to think their market is "different" until prices start to go south. If you purchase a commerical property based on real valuation methods then you can be assured your asset will maintain its value. No doubt demand drives down the caps on downtown retail properties, but if you are a proponent of overpaying then you are acting simply like every other broker in the real estate game. Just because you've been around for 30 years doesn't mean that you are still "germane", especially if you are advising clients to overpay because they have a "need" for a property in a "location".
Any by the way, I am not a broker or agent or owner and I have never done business in town or anywhere in the region for that matter. I work in real estate for a international real estate company with plenty of experience in commercial real estate. How in the world can you claim to best represent your clients when you have been buying, selling and leasing to both owners and tenants for 30 years? Just because you have the relationships doesn't mean you are qualified to counsel clients without being compromised, especially if all you do is stick your thumb in the air and see which way the wind is blowing in order to guesstimate value.
When you posted your cell phone number that really drove home the point that you really are a broker...always looking for the deal.
Well - say what you will about 'Marshall Heaven' - most certainly have - 'Marshall' was always nice to us - we respect him - we like him - and I - for one - was glad to know 'Marshall' is still around and we hope he is doing well!
Interesting comments - by all - we certainly learn a-lot - thank you
Chris - you do us all a great service!
Post a Comment