Should I buy a NNN post office? - Posted by Brian,WI

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Posted by Nate(DC) on January 04, 2003 at 16:48:55:

Nope.

NT

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Should I buy a NNN post office? - Posted by Brian,WI

Posted by Brian,WI on December 30, 2002 at 13:16:38:

With an ad I have running trying to locate properties to buy because I’m in a 1031, I got a call from someone that says he has a post office for sale. He says its basically a NNN lease except for the roof(flat) and the selling is looking a putting a billboard on the roof for additional income(the property is close to the freeway so this should work).

There is a 5 year lease with a 5 year option and they are 1 year into the lease.

So…Is the Postal Service in trouble with the internet around to save on stamps??? Is this something that I should look further into?

I think the asking price is $320,000 and rent is $40,000 (I took quick notes when he called and would need to verify that)

Thanks

Brian,WI

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Re: Should I buy a NNN post office? - Posted by Nate(DC)

Posted by Nate(DC) on December 30, 2002 at 20:45:31:

I’d also put a little brainpower into examining other potential uses for the building in the event it’s no longer a post office at some point in the future. Is it easily convertible to another retail or office use? Is it in a location that would be desirable for another use?

NT

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Re: Should I buy a NNN post office? - Posted by ray@lcorn

Posted by ray@lcorn on December 30, 2002 at 15:57:53:

Brian,

Always read the lease. I doubt a USPS lease will allow the roof to be used for a billboard.

Also check for improvement and refurbishment clauses. Government leases, even the NNN ones, routinely require the landlord to replace some capital items.

As to the credit quality of the tenant, that’s an interesting question. If a private concern had financial statements that looked as bad year after year as the USPS the credit would have a below junk rating. However the lease has the backing of the US Government, and they do pay their bills (as well as create them!)! Standard due diligence includes evaluating the lease language for cancellation clauses. I’ve seen some doozies. Remember that the lease is the major component of the asset, and treat it as such.

ray

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Re: Should I buy a NNN post office? - Posted by Jim Rayner

Posted by Jim Rayner on December 30, 2002 at 13:48:11:

short answer: look into it more!

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REIMW - Posted by Richard Tator

Posted by Richard Tator on December 30, 2002 at 22:12:28:

Do you have any experiences with REIMW?
(Pro or Con)

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Re: REIMW–google search results–RE Invst Club - Posted by Jeffrey

Posted by Jeffrey on January 04, 2003 at 18:44:22:

A quick trip over to google.com suggests that REIMW is a local RE investing club in the DC area.

Regards

Jeffrey