Trip to Oxford - 7-May-2010

Went to Oxford (Lafayette county) on Friday and saw 3 properties.

First was DeLa Vine II, right off of highway 6 as you come into Oxford from the West.  Two story with commercial space on bottom and condos on top.  14,960 sq ft.  Asking price is $2.2 million.  David Hollinger 662-934-9148.

Next was a big warehouse at 927 Whirlpool drive which was vacant.  It is near Ole Miss and whoever was in this before has moved out.  Some sort of manufacturing company.  Agent is Jones Lang LaSalle company.  422,000 sq ft on 58 acres.  Price was not available.

Last was warehouse at 13 Industrial drive off highway 7 south of Oxford.  68,000 sq ft on 5.5 acres.  List price is $1.5 million or $22.06 per foot.  Colliers Wilkinson Snowden.  Preston Thomas 375-4800.  Talked to Preston by phone.  Last tenant, Toro, was paying rent of $3.5 NNN (triple net). Preston Thomas said that was too high.  He said that some one has the building under contract to turn it into a sports workout gym.  That person has gotten approval from Oxford authorities to do the conversion.  I don't know what taxes, insurance and property maintenance are on the property, but surely they are at least $1.5 per foot per year, so that makes total rent around $5 per foot which is what we used to get at NBC for small spaces.  So I agree rent of $3.5 NNN is too high and that owner could only probably get ????? maybe $2 per foot??  At $2 per foot NNN, it shows a much less attractive return than at $3.5 per foot NNN.

Preston also has a retail center for sale in Oxford.  It is 100,000 sq ft and is at hwy 7 and University.  Asking price is $5.5 to 6 million.

He also mentioned that the "EC" building (Exact Commerce) on South street in Collierville near Shamrock is still for sale. It is 40,200 sq ft total with 5,270 sq ft being office.  Price used to be $2.2 million and now it is $1.75 million and owner wants to sell and might go lower.  There is a brand new tenant in building who signed a 3 year lease.  The new lease provides $3 per foot NNN to owner, which is approx $10,000 per month free and clear.  

De La Vine II - Oxford MS

14,960 square foot 2 story building with commercial space on bottom floor and condos (now for rent) on top floor.  Owned by David and Deanna Hollinger.  Deanna's office number is (662) 234-1234. Address is 101 Ricky D Britt Blvd, Oxford 38655. David (662-934-9148 cell) said that there are 4 commercial spaces on ground floor which are approx 1870 sq ft each.  He has one rented to a lawyer now for $2000 per month which is $12.83 per foot.  There are 8 upstairs condos and they are built to be converted easily to commercial space if and when time is right.  He is leasing these condos now because they are hard to sell.  He is leasing for approx $750 per condo.  So potential income right now is 4 x $2000 = $8000 downstairs and 8 x $750 = $6000 upstairs for a total monthly revenue of $14,000.  That's $168,000 per year.  $168,000 per year minus 8% vacancy and collection loss ($13,440)  =  $154,560.  If expenses are 40%, then NOI is $154,560 - $61,824 = $92,736.  So at a cap rate of 9%, building is worth $1,030,400 or about $69 per foot.  It is priced at $2.2 million or $147 per foot !!!!!!!

Hollinger has the original De La Vine off Jackson (??) near an Applebees and some hotels.  It is only one story.