One of my rich acquaintance is looking to invest in industrial warehouse, the seller claims to make 8 CAP. but that doesn’t seem right to me, because all larger multiplex properties in the city is only aiming for 4-6% cap, so why should the warehouse have higher return?
What are the cost associated with running a warehouse? I would think the 50/50 rule won’t apply.
The utilities are covered by tenants, so the cost are Taxes, Insurance, Repair reserve, snow removal, (garbage is covered in tax) smaller management cost. It does seem to cut out a lot of expenses an apartment building would have, such as appliances reserve, cleaning cost.