Restaurant vacant for 2 years. Owner offered $1000 a mos for lease. What is the best appraisal approach?

Former J&S Cafeteria vacant for 2 years. Owner has been offered $1000 a month for a lease amount. This is about 67% less than former lease amount. No current income to request. I have worked up cost approach. Owner wants me to calculate value based on potential lease amount with no expense and 10% cap...
In General Area - Asked by Jon B. - May 6, 2010
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Answer(s)

Jennifer D.
Broker/Agent
Danvers, MA

For a property vacant for 2 years he should take what he can get! In my area, north of Boston, market rents are back to where they were in the very early 2000's. Example: I have a property for lease at 14NNN where the guy across the street is currently locked in at $22NNN with scheduled increases. While I am still on the market, I am not even encouraged I can get him $14. Instead of the lease terms, perhaps your property owner should look at an attractive lease agreement such as a percentage lease. They are getting more popular lately! Check my website for different types of leases.
Brian Dapice
Keller Williams Commercial

May 7, 2010
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