Kupiszewski

2349 North Monroe Street

Stan Kupiszewski asked me to prepare a quick analysis of the Walgreens Site on North Monroe Street in Tallahassee, Florida. This is by no means a property appraisal, rather just some thoughts that I have about the property value. I spoke with a few friends of mine who are very active in retail real estate (ownership, development, and sales) to formulate this summary.

In an attempt to provide the information that I believe you are seeking, I have prepared this page as a lightening-quick overview of the property and its potential value at market. Most likely, you could order a $3000 appraisal to get a 100 page analysis that will tell you the same thing :).

Income Approach

Long term lease with Walgreens. One could do a simple NPV analysis on the lease to determine an income-based value of the property. Currently, with the state of the real estate market in decline, this would be viewed with skepticism and an expectation that Walgreens will not be renewing the lease. Thus, this form of valuation is not highly accurate for determining a real sales value.

Cost Approach

A cost approach determination of value would likely yield an improvement value no less than $110 per square foot, and the "elephant in the room" will be the value of the land. Currently, there are far more sellers than buyers in most commercial real estate markets, and Tallahassee is no different. Additionally, the unknown status of the future of the Tallahassee Mall, adjacent to the subject property, will create a "wait and see" response from the market.

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Comparable Sales

Ultimately, I think the highest and best use of this property prohibits a tear-down for re-development. The discussions that I had with my pears makes me fairly confident that the best value received with be from a single or multi-use retail owner. There are very few organizations in Tallahassee that need 15,000 square feet, so the multi-tenant owner/occupant will be the top dollar possible.

Our general consensus that even at liquidation pricing, this site should yield no less than $800,000. Our feeling was a land value in the $1M to $1.5M range, and thus an as-is value of $2M to $2.5M is realistic, if a buyer can be found.

The scarcity of money has left the investment market with just cash-strong bottom feeders. This is no market to be trying to sell an asset at top dollar, as values have dropped substantially. The solution for a sale would require an extended lease with Walgreens or another similar, top rated tenant. We also considered extended stay hotels, restaurants, and office-supply stores as good targets to approach for selling.

A good comparable property happens to be one that I had ownership and sold in October (1500 Miccosukee Road in table below). The land was premium grade, contiguous with Tallahassee Memorial Hospital. It contained an old school house and church, but the property was purchased for redevelopment by the hospital. Without them as a buyer, there were no other real suitors.

I have provided a list of every commercial transaction on retail and raw land that has occurred in Leon County since January 2010. I have restricted the list to properties between 1 and 2 acres in order to give you a feel of what has sold (I omitted quit-claims at negligible dollar amounts). Again, no real analysis here, I'm just providing some data from the market place.

If I can provide any further information, please do not hesitate to contact me through this simple form [link to form].

AddressPriceSQFT HCParcel SizeGIS AcresYear BuiltSale Date
2877 W THARPE ST 730,000 18000 63858 SquareFeet 1.29 1975 2/28/2011
324 N ADAMS ST 234,400 9102 44200 SquareFeet 1.02 1969 2/2/2011
1879 CAPITAL CIR NE 778,000 1236 43560 SquareFeet 1.76 2002 1/14/2011
STE 1 272,000 54102 SquareFeet 1.26 1/4/2011
1524 JACKSON BLUFF RD 810,000 2900 53535 SquareFeet 1.28 1986 12/29/2010
110 FOUR POINTS WAY 1,592,000 27880 2.09 Acres 2.09 1974 12/29/2010
1585 SUMMIT LAKE DR 6,105,800 65340 SquareFeet 1.5 12/29/2010
2910 MAHAN DR 1,100,000 1929 43560 SquareFeet 1.33 1989 12/28/2010
545 E TENNESSEE ST 200,000 20056 40946 SquareFeet 1.32 1986 12/20/2010
280,000 2.1 Acres 1.83 12/17/2010
4098 N MONROE ST 167,000 7150 103673 SquareFeet 1.94 1985 12/16/2010
1950 THOMASVILLE RD 2,375,000 26141 100188 SquareFeet 2.22 1955 12/13/2010
1424 PIEDMONT DR E 950,000 9070 42688 SquareFeet 1.03 1994 12/2/2010
5670 N MONROE ST 5,403,000 59133 SquareFeet 1.35 12/1/2010
5648 BLOUNTSTOWN HWY 350,000 2128 69827 SquareFeet 1.6 1985 11/18/2010
3575 TALLAHASSEE DR 80,000 62290 SquareFeet 1.24 11/5/2010
CAPITAL CIR NW 1,200,000 87120 SquareFeet 1.98 11/2/2010
2236 CAPITAL CIR NE 1,600,000 14904 62291 SquareFeet 1.43 2007 11/2/2010
1500 MICCOSUKEE RD 1,775,000 26433 98271 SquareFeet 2.16 1970 10/26/2010
4849 SIX OAKS DR 65,400 87991 SquareFeet 2.15 10/12/2010
4030 N MONROE ST 950,000 9520 80629 SquareFeet 1.91 2005 10/12/2010
2752 W PENSACOLA ST 300,000 3072 30247 SquareFeet 1.05 1987 10/7/2010
COMMONWEALTH BUSINES DR 800,000 52272 SquareFeet 1.29 10/7/2010
1500 BANNERMAN RD 870,000 3825 51400 SquareFeet 1.16 1999 10/7/2010
2330 MAHAN DR 2,526,200 18849 52272 SquareFeet 1.21 1996 10/6/2010
3206 APALACHEE PKWY 287,500 3577 45302 SquareFeet 1.07 1998 9/17/2010
3206 APALACHEE PKWY 287,500 3577 45302 SquareFeet 1.07 1998 9/15/2010
5454 THOMASVILLE RD 1,250,000 7488 49223 SquareFeet 1.13 2003 9/2/2010
1930 THOMASVILLE RD 1,500,000 11118 42471 SquareFeet 1.1 1952 9/2/2010
7494 BLOUNTSTOWN HWY 120,000 2928 1 Lot/Tract 1.14 1970 8/6/2010
2997 APALACHEE PKWY 1,125,000 20504 50 Lot/Tract 1.85 1956 7/30/2010
2501 S MERIDIAN ST 400,000 14400 32 Lot/Tract 1.25 1973 7/22/2010
CAPITAL CIR NW 200,000 87120 SquareFeet 1.98 7/12/2010
4583 CAPITAL CIR NW 975,000 10994 2.11 Acres 1.97 1995 6/11/2010
3666 PEDDIE DR 215,000 2500 43560 SquareFeet 1 2000 6/4/2010
1115 GREENTREE CT 296,200 10528 7 Lot/Tract 1.44 2001 5/17/2010
4930 WOODLANE CIR 265,000 3200 74050 SquareFeet 1.67 1977 5/11/2010
3430 WEEMS RD 150,000 43560 SquareFeet 1 4/13/2010
1413 PULLEN RD 990,000 18144 18 Lot/Tract 1.17 1983 4/9/2010
1430 PIEDMONT DR E 2,300,000 13136 58806 SquareFeet 1.36 1996 3/24/2010
2545 N MONROE ST 700,000 5127 49200 SquareFeet 1.17 1976 3/23/2010
401 PUTNAM DR 150,000 24320 16 Lot/Tract 2.13 2005 3/16/2010
3642 PEDDIE DR 237,500 1170 43554 SquareFeet 1 2008 3/16/2010
1602 STUCKEY AVE 570,000 25944 56 Lot/Tract 1.24 1974 3/11/2010
1979 MARYLAND CIR 550,000 2860 49222 SquareFeet 1.39 1996 2/25/2010
3701 W ORANGE AVE 203,600 1297 1.26 Acres 1.28 1965 2/10/2010
333 CONRADI ST 552,800 31158 62 Lot/Tract 1.37 1968 2/8/2010
3561 TIMBERLANE SCHOOL RD 750,000 3860 54419 SquareFeet 1.07 1977 2/4/2010
1904 OLD BAINBRIDGE RD 277,200 44431 SquareFeet 1.24 1/27/2010
2870 APALACHEE PKWY 500,000 2310 27442 SquareFeet 1.26 1983 1/26/2010

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