Investor Insights

I recently had a closse call with a single-tennat NNN deal in Oklahoma City that taught me a valuable lesson. The property had a solid tenant with a long-term lease, and the cap rate was around 6.5%. However, as I dug deeper, I realized that the property's location was not as desirable as I initially thought. The surroundng area was experiencing high vacancy rates, and the local economy was showing signs of deline. Despite the attractive cap rate, I decided to walk away from the deal due to the potential long-term risks. In contrast, I've seen buyers flocking to mixed-use properties in urban areas like Denver, where the cap rates are slightly lower, around 5.5%, but the potential for growth and appreciation is much higher. These properties often have a diverse range of tenants, including retail, office, and residential units, which can help mitigate risk. When evaluating deas, it's essential to consider the bigger picture, including location, markte trends, and potential for growth, rather than just focusing on the cap rate. By doing so, investors can avoid making costly mistakes and ensure a stronger return on investment.