The 1031 Doctor is always looking for low price point corporate deals in urban areas like Houston Texas. This deal in Houston Texas fits the bill. You could not but the land and build this building for the price they are asking. https://www.texas.gov
The only issues I have with this Jack in the Box is the fact that it’s not the hard corner and its primary lease term is coming to an end, which is a good thing to some degree, if they leave you can relet the site for much higher rents, if they stay, the new owner will have a harder time refinancing or selling the property with five year options. You want to have 10 years left on primary terms to get the low cap rates and high liquidity. This is one of those deals where you want the tenant to leave but are still happy if they stay.
The Houston area is terrific and there seems to be a lot of high density residential in the immediate area. The “energy corridor” is close to this vicinity and Texas in general is one of the highest growth and tax-free states in the country. I grade this deal a B- and would try to pick this up for around a 6% cap.
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