Advice on value of commercial property

I’m looking at a small commercial property in Brooklyn.  I have negotiated a price that seems good, but am now having second thoughts– no contract has been signed and I’m not working with a buyer’s broker. I don’t need a buyer’s broker either– I just could really use someone who knows about this market to bounce this situation off of.  I’m not looking to be cheap, but I’d rather not pay a lot for someone to consult with– I just would hope to get in touch with someone who could take 5 minutes to hear the set-up and say “yes, that is a fair price” or “no, that’s too much”.  I don’t need any extensive appraisal, just a simple bit of advice from someone who knows. It’s been hard to find comps because, unlike a regular residential building, a small commercial space like this in this area and particular setup is not common from the research I’ve done during my property search. Any advice is very welcome- thanks Brownstoners!

stickerhappy

in Real Estate - Sales 13 years and 4 months ago

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digital1234 | 12 years and 10 months ago

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Bklnite | 13 years and 4 months ago

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bklnite to bknites: I’d be happy to look at it and give the quick opinion of someone who’s looked at lots of potential investment properties if you email the setup to bklnite@gmail.com I have a residential building, and am looking for another property, residential or mixed use. I personally would stay away from commercial. And there are different of types of commercial propeties which are all their own unique market – office, retail, etc. Unless you have experience with that kind of property, or want the space to use for your own business venture, or it’s got really solid tenant(s) and you can expect a really good return on your investment it’s likely not worth the risk.

daveinbedstuy | 13 years and 4 months ago

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I think you really have to do more work on the surrounding area and what commercial spaces rent for in that area.  Once you know that and are comfortable with what it will rent for (never certain, and lots of businesses fail fast for not having done similar research), then calculate what an acceptable return is given ALL of the costs, including the opportunity cost of your downpayment.     You never stated why it is that your interested in this property.  If it’s simply as an investment, evaluate it against returns for Treasuries (3% for 30 years) and blue chip stocks (3-5%), which, over the longer term, are relatively riskless.