What are ways to determine a 20% "buy-in" purchase price into a half way developed retail project?

73,000 sq ft existing with 50% vacate
85,000 sq ft potential (2 future pads)
Would you base price on 20% of costs or current valve or furture potential valve or what?
In Selling Property - Asked by Jon K. - Apr 16, 2011
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roni e.
Property/Asset Manager
Maitland, FL

someone to put money in now will say what is today value to get everything open. Future value will be very hard to convince them as that would be the sales value.

Apr 17, 2011
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Mark S.
Broker/Agent
Brandon, FL

I wouldn't look for a quick answer to this question. It will take lots of research in the submarket so that you have a solid understanding of rent levels, vacancy rates, absorption rates, etc. You will need to forecast cash flows (reflecting the absorption) out into the future and then discount them back to a present value. Most properties are trading at prices well below replacement costs, so that's not really helpful. Cost does not necessarily = value.

Apr 17, 2011
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