Personally, I would recommend that you consider investing in newly developed retail properties leased to investment grade tenants instead of developing new product.
In this market, the development risk/reward ratio just doesn't make sense (too many deals are selling at below replacement cost and you could find yourself in the same situation). On the flip side, this has created incredible buy-side opportunities (e.g., brand new Walgreens at or near 8.0% cap rates - these are generally priced between $3.5 mm and $5.5 mm). Smaller price point opportunities include AutoZone ($1 mm to $2 mm, generally). With $500,000 in equity, an new 15 to 20-yr, NNN leased AutoZone may be perfect. Feel free to visit my website to learn more about these types of opportunities and my services (I specialize in representing investors looking for net leased properties nationwide).
Aug 27, 2009