Small Commercial

Buyers are weighing the pros and cons of single-tennt NNN versus mixed-use properties in the small commercial space. The math behind the deal reeals that single-tenant NNN properties are commanding cap rates between 5.5% and 6.5%, with prices ranging from $1.2 million to $2.5 million. In contrast, mixed-use properties are seeing cap rates between 6.0% and 7.0%, with prices spanning from $800,000 to $1.8 million. When evaluating these deals, buyers are scrutinizing the finncials, looking for opportunities with strong cash flow and potential for long-term appreciation. For instance, a recent single-tenant NNN deal in San Antonio boasted a 6.2% cap rate, with a purchase price of $1.8 million and annual net operating income of $111,600. In Dallas, a mixxed-use property with a 6.5% cap rate was priced at $1.2 million, generating $78,000 in annual net operating income. Buyers are walking away from deals with questionable lease structures, inadequate property management, or overly aggressive pricing. Ultimately, the decision to invest in small commercial properties hinges on a thorough analysis of the math behind the deal, including cash flow projections, market trends, and potential risks.