Why Commercial Real Estate
Back in 2006, when I first dreamed of doing a real estate deal, my mentor at the time owned 40-50 rental houses in the neighborhood I grew up in outside of Philadelphia. That became my goal too. Last week when he & I were talking he mentioned that he has since sold them all. Now he’s the chairman & founder of a hedge fund with about a billion under management-and a lot of that is commercial real estate. His goal now, in his 60’s, is to simplify his personal portfolio in advance of someday leaving it as an inheritance. This is my plan too.
This illustrates the reason I am investing in commercial RE-to consolidate & simplify my portfolio over time. I have houses in Philadelphia & apartment buildings in Chicago and I’m going to sell them all and doing a big 1031 exchange into a new build beach house in Avalon, NJ. Do you happen to have a tear down for sale? Ideally Oceanfront?
***About Avalon-for our readers around the U.S.*** – The name “Avalon” comes from the King Arthur mythology and was the island where the Excalibur sword was forged. In modern history, in New Jersey, Avalon is a town on an Island shared with Stone Harbor. If you vacation here you might meet a commercial real estate developer in the line behind you waiting to get ice cream – this actually happened when I was there last week. He shared that his house on the Island was the best investment he’s ever made in his life.
Commercial real estate investing offers consolidation. Instead of my 25+ tax bills, insurance bills, mortgages, etc, I’ll buy a house, tear it down and build a high end vacation home which will rent all summer long for $25,000 per week, or more. One tax bill, one mortgage payment, one insurance company. And I might even get to go down and stay there every so often. I guess this is actually still a house, but the cost basis above $4M feels more like commercial to me.
Here’s One of Our Recent Shopping Center Deals
Here at Diamond Equity, we buy retail & industrial property, but would consider any commercial property offering value add potential. Every deal must have an immediate pathway to significantly increase the value of the property within 24-36 months.
Right now we own this 62,346 sq. ft. retail center in Vegas. It was 55% occupied when we bought it and is now 93% occupied. This deal has worked out well for us so far over the past 36 months of ownership – it took about 18 months to stabilize, but now pays consistent monthly distributions.
I’d buy this type of deal again located in any U.S. market with 50,000 people within 3 miles, Household income of $50,000 or more, and 22,000 vehicles per day or more. It’s just gotta have some upside!!
Do You Have a Deal For Sale?
Here’s our Buy Box
- Retail Strip or Shopping Center
- Industrial or Flex Warehouse20,000 – 200,000 Sq. Ft.
- Population 50,000 or more in a 3 mile Radius
- Bonus: Located 3 hours from any of our offices: Atlanta, GA, Chicago, IL, or Philadelphia, PA
Podcast Coming Soon: Redeveloping Dying Shopping Malls
This week I interviewed Rafik Moore on the REI Diamonds Show. Rafik is the founder of Brait Capital, a commercial redevelopment firm currently focused on bring dead malls back to life. One of these projects closed about 18 months ago is now 75% occupied through his repositioning strategy. This podcast will be released in the next two weeks, so keep an eye out.
Rafik is also a friend whom I met through the Commercial Academy Mastermind. We will both be attending the Cleveland event – August 23-25th. If you’d like to be my guest, please email me using the subject line “Commercial Academy”. This group has been instrumental in Diamond Equity’s rapid results in the Commercial Real Estate arena. It’s another level compared with flipping houses!!
Development Deal for Sale – Marietta, GA
Interested in this deal? Call or Text James Harris – 770-861-3311
23XX Powder Springs Road SW
Marietta, GA 30064
4.65 Acres on the Hard Corner at Wood Meadows Road
Demographics:
- 3 Mile Population 62,329
- 3 Mile Daytime Employees 18,631
- 3 Mile Median HH Income $69,891
- 2022 Powder Springs Traffic 22,247 vehicles per day
Price $865,000
The site is currently zoned for single family residential, and works at this price. Successfully rezoning this parcel will either yield more units (townhouse upzone) or 2 commercial pad sites with residential townhouses in the rear (see 2nd photo below).
23XX Powder Springs Road – 4.65 Acre Parcel, next to Retail Strip Center
Concept with Two 1 Acre Pad Sites & 11 – 22 townhomes, subject to approval
