Hi guys
As I mentioned in other threads I am looking into some CIP possibilities at the moment so there might be a few questions coming... be warned!
To give an example of one lease I'm looking at on an industrial + showroom property, it has a lessee with a presence in two states but not a well known brand or big name. The yield is in the mid 8s with CPI increases for a six year term. Nice building will have some depreciation and a good slab of land. There are director's guarantees sitting behind the lease. My questions (this time) are:
1 What methods are available to assess the profitability / management of the business to assess likelihood of default? I'm aware of the Dunn and Bradstreet type reports but are there cheaper / better options? What do you use?
2 As above but this time for the ability of the directors to back up the lease?
3 Approx what level of yield premium would you be prepared to pay to secure a "first tier" govt / multinational / bank long term lessee?
4 How do you work out land value? Engage professionals or try and work it out from sales yourself by subtracting a guess of building value (difficult here because of limited sales in the area)?
I'll stop here this time. Thanks in advance for any help!
As I mentioned in other threads I am looking into some CIP possibilities at the moment so there might be a few questions coming... be warned!
To give an example of one lease I'm looking at on an industrial + showroom property, it has a lessee with a presence in two states but not a well known brand or big name. The yield is in the mid 8s with CPI increases for a six year term. Nice building will have some depreciation and a good slab of land. There are director's guarantees sitting behind the lease. My questions (this time) are:1 What methods are available to assess the profitability / management of the business to assess likelihood of default? I'm aware of the Dunn and Bradstreet type reports but are there cheaper / better options? What do you use?
2 As above but this time for the ability of the directors to back up the lease?
3 Approx what level of yield premium would you be prepared to pay to secure a "first tier" govt / multinational / bank long term lessee?
4 How do you work out land value? Engage professionals or try and work it out from sales yourself by subtracting a guess of building value (difficult here because of limited sales in the area)?
I'll stop here this time. Thanks in advance for any help!
