An Update for the Northern Alberta Truck Wash

A brief bit of interesting news returns me to updating my blog far too quickly. It appears that the building I was after for the Northern Alberta Truck Wash may have been taken over by the bank. Other interesting facts include the existence of 4 tenants, none of which have any documented leases, and the lease rate for the building would be no more than $5.00 -$6.00 per square foot.

Analysis of the lease rate leads to a building worth no more than $600,000 with a 12% cap. rate at $6.00 per square foot and $500,000 with a $5.00 per square foot lease rate. Keeping in mind that a portion of the building is empty and 25% is owner occupied, the actual value should be somewhat closer to 60% of those values. Asking price on this building was closer to $700,000, which would be supported by a $5.00 lease rate with an 8.00% cap rate - or a $7.00 lease rate with a 12% cap (more likely, but still high for the market).

So, my initial assumptions of purchasing the building for $500,000 don't seem too far out from the actual value of the place - and I want to move on it quickly to ensure a consolidation in that marketplace, but it may prove fairly difficult to get funding there for a car wash as this one has failed so completely.

Well, here's to the future.