Opportunity in Miami International Merchandise Mart
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REAL ESTATE BUSINESS INVESTMENT OPPORTUNITY!!.
It¿s about two spaces joined together that are being used as a wholesale store in the well known MIAMI INTERNATIONAL MERCHANDISE MART located in 777 NW 2nd Avenue (units 1100 and 1101), Miami, Florida 33126. This is a combined space totaling 2,029 Ft2 (188 m2). It's worthy to mention that this MART is also interconnected with the MIAMI MART AIRPORT HOTEL, that due to it¿s proximity to Miami International Airport, enjoys high occupancy indexes.
This MART was originally built in 1976 and has an interior area of 376,099 Ft2 (34,940 m2), 3 stories and a rental area of 264,865 Ft2 (24,606 m2) containing 452 individual spaces for commercial stores use. The areas that are not available for stores are considered common areas (restaurants, promenades, etc) and also an important CONVENTION CENTER. The place is well maintained and located in an easy access zone (intersection of expressways Dolphin and Palmetto).
This Merchandise MART was converted in CONDOMINIUM in 2005, and until now 125 units were sold (buyers were tenants already using these spaces and also investors that in turn they lease to existing and non exiting tenants.
The rest of the units (327), the majority of tenants have signed lease contracts for terms up to 12 years. Most of these tenants cater to the fashion and apparel industry
Most tenants are wholesalers who¿s customers are retailers. The Merchandise Mart is generally not open to the general public. Admission is granted to registered retailers with tax identification numbers. This is the only MERCHANDISE MART located within the South Florida region. These type of facilities are typically located near major metropolitan areas. Other areas that include such MARTS are Chicago, Denver, Dallas and Los Angeles.
The combined spaces that I am offering to you were delivered to the present owner to compensate him for an unpaid debt from the previous owner. His failure to pay his debt was not related to this business. The present owner is selling because he is not an investor, and his own business demands a lot of rotating capital. Therefore he aims to stay as liquid as he can. However he is not in a hurry to sell because as you will see while you examine the rest of this report, this business is giving him interesting revenues and satisfactions.
One of the good things about this offer is that the tenant is excellent, (G&B SALES), who besides renting this space, rents also another space located right beside. This tenant has excellent customers that provide him with enough income to enabled him to have signed a lease contract for seven years starting September 1rst 2007 and expiring August 31, 2014. Also this agreement has a clause in that establishes an yearly rise of 5% in the rental fees.
We should keep in mind that in the US the market value of commercial real estate is based on the profits it generates and not so much on the other real estate comparables, like residential real estate does. Based on this principle is that in the financial projection sheet, you will notice an annual appreciation of 3.5%. However this figure should be considered a conservative approach if we take into account that historically, the appreciation rates with this kind of lease contracts is significantly higher.
In the MS EXCEL table that you will find BY CLICKING HERE, you will see the annual revenues and expenses on the top of the sheet. Scrolling down you will see the FINANCING COSTS calculated at 7% annual interest for the 50% of the purchase price of $1.7M, therefore $850K.
Scrolling further down you will then see a 10 YEAR PROJECTION that includes all the annual values and its accumulated figures.
PLEASE OBSERVE THAT AFTER ¿NINE¿YEARS¿, THE LINE OF ¿ACCUMULATED PRINCIPAL¿ REGISTERS $733,174, AND IF WE ADD THE ¿CASH FLOW FOR THAT YEAR¿, $110,259, THE AMORTIZED TOTAL WILL SHOW $833.323. THEREFORE THIS IS SHOWING THAT THE TOTAL FINANCIAL DEBT HAS BEEN TOTALLY AMORTIZED WITHOUT THE INVESTOR HAVING TO INCUR IN ANY FUND DISBURSEMENT DURING THE 9 YEARS. THEREFORE THE INFLOWS OF THE LEASE PAYMENTS HAVE PAID THE FINANCIAL DEBT BY ITSELF IN 9 YEARS.
THIS MEANS THAT THE INVESTOR WILL TOTALLY OWN THE COMMERCIAL SPACE THAT HAS ALSO INCREASED ITS MARKET VALUE BY $600K, AS ITS VALUE WOULD HAVE BECOME $2,316,926 BY THEN.
BESIDES, THE LANDLORD (INVESTOR) WILL HAVE AN ANNUAL POSITIVE CASH FLOW STARTING AT $192,977 AND MOST LIKELY INCREASING EVERY YEAR.
POSSIBLY, WHAT SHOULD BE CONSIDER EVEN MORE RELEVANT, IS THE FACT THAT IF THE PROPERTY WAS TO BE SOLD, ITS BUYER WILL START WITH A ¿CAP RATE¿ OF ALREADY 8%. THIS DEMONSTRATES THE BUSINESS FACTIBILITY AT A VERY LOW RISK INDEX.
GLOSARY; RSF: Rental Square Feet ¿ ROI: Return on Investment ¿ to convert Ft2 to m2, multiply by 0,0929. ¿ To covert $Ft2 in $m2 by 10.75.
It¿s about two spaces joined together that are being used as a wholesale store in the well known MIAMI INTERNATIONAL MERCHANDISE MART located in 777 NW 2nd Avenue (units 1100 and 1101), Miami, Florida 33126. This is a combined space totaling 2,029 Ft2 (188 m2). It's worthy to mention that this MART is also interconnected with the MIAMI MART AIRPORT HOTEL, that due to it¿s proximity to Miami International Airport, enjoys high occupancy indexes.
This MART was originally built in 1976 and has an interior area of 376,099 Ft2 (34,940 m2), 3 stories and a rental area of 264,865 Ft2 (24,606 m2) containing 452 individual spaces for commercial stores use. The areas that are not available for stores are considered common areas (restaurants, promenades, etc) and also an important CONVENTION CENTER. The place is well maintained and located in an easy access zone (intersection of expressways Dolphin and Palmetto).
This Merchandise MART was converted in CONDOMINIUM in 2005, and until now 125 units were sold (buyers were tenants already using these spaces and also investors that in turn they lease to existing and non exiting tenants.
The rest of the units (327), the majority of tenants have signed lease contracts for terms up to 12 years. Most of these tenants cater to the fashion and apparel industry
Most tenants are wholesalers who¿s customers are retailers. The Merchandise Mart is generally not open to the general public. Admission is granted to registered retailers with tax identification numbers. This is the only MERCHANDISE MART located within the South Florida region. These type of facilities are typically located near major metropolitan areas. Other areas that include such MARTS are Chicago, Denver, Dallas and Los Angeles.
The combined spaces that I am offering to you were delivered to the present owner to compensate him for an unpaid debt from the previous owner. His failure to pay his debt was not related to this business. The present owner is selling because he is not an investor, and his own business demands a lot of rotating capital. Therefore he aims to stay as liquid as he can. However he is not in a hurry to sell because as you will see while you examine the rest of this report, this business is giving him interesting revenues and satisfactions.
One of the good things about this offer is that the tenant is excellent, (G&B SALES), who besides renting this space, rents also another space located right beside. This tenant has excellent customers that provide him with enough income to enabled him to have signed a lease contract for seven years starting September 1rst 2007 and expiring August 31, 2014. Also this agreement has a clause in that establishes an yearly rise of 5% in the rental fees.
We should keep in mind that in the US the market value of commercial real estate is based on the profits it generates and not so much on the other real estate comparables, like residential real estate does. Based on this principle is that in the financial projection sheet, you will notice an annual appreciation of 3.5%. However this figure should be considered a conservative approach if we take into account that historically, the appreciation rates with this kind of lease contracts is significantly higher.
In the MS EXCEL table that you will find BY CLICKING HERE, you will see the annual revenues and expenses on the top of the sheet. Scrolling down you will see the FINANCING COSTS calculated at 7% annual interest for the 50% of the purchase price of $1.7M, therefore $850K.
Scrolling further down you will then see a 10 YEAR PROJECTION that includes all the annual values and its accumulated figures.
PLEASE OBSERVE THAT AFTER ¿NINE¿YEARS¿, THE LINE OF ¿ACCUMULATED PRINCIPAL¿ REGISTERS $733,174, AND IF WE ADD THE ¿CASH FLOW FOR THAT YEAR¿, $110,259, THE AMORTIZED TOTAL WILL SHOW $833.323. THEREFORE THIS IS SHOWING THAT THE TOTAL FINANCIAL DEBT HAS BEEN TOTALLY AMORTIZED WITHOUT THE INVESTOR HAVING TO INCUR IN ANY FUND DISBURSEMENT DURING THE 9 YEARS. THEREFORE THE INFLOWS OF THE LEASE PAYMENTS HAVE PAID THE FINANCIAL DEBT BY ITSELF IN 9 YEARS.
THIS MEANS THAT THE INVESTOR WILL TOTALLY OWN THE COMMERCIAL SPACE THAT HAS ALSO INCREASED ITS MARKET VALUE BY $600K, AS ITS VALUE WOULD HAVE BECOME $2,316,926 BY THEN.
BESIDES, THE LANDLORD (INVESTOR) WILL HAVE AN ANNUAL POSITIVE CASH FLOW STARTING AT $192,977 AND MOST LIKELY INCREASING EVERY YEAR.
POSSIBLY, WHAT SHOULD BE CONSIDER EVEN MORE RELEVANT, IS THE FACT THAT IF THE PROPERTY WAS TO BE SOLD, ITS BUYER WILL START WITH A ¿CAP RATE¿ OF ALREADY 8%. THIS DEMONSTRATES THE BUSINESS FACTIBILITY AT A VERY LOW RISK INDEX.
GLOSARY; RSF: Rental Square Feet ¿ ROI: Return on Investment ¿ to convert Ft2 to m2, multiply by 0,0929. ¿ To covert $Ft2 in $m2 by 10.75.
- Neighborhood: CLOSE TO MIAMI INTERNATIONAL AIRPORT
- Lot Size: Whole MART: 376,099
- Type: Commercial for Sale
- Floors: Two or More Stories
- Square Feet: 2,119
- Parking Lot
- Security Features
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