Industrial Flex, Re-Underwritten
Saguaro Ridge Commerce Park
A 6,200 SF industrial flex deal where the marketed cap rate didn’t survive contact with real expenses.
Industrial Flex, Re-Underwritten
Saguaro Ridge Commerce Park
A 6,200 SF industrial flex deal where the marketed cap rate didn’t survive contact with real expenses.
Client
Confidential — Private Buyer
Client
Confidential — Private Buyer
Location
Phoenix MSA, AZ
Location
Phoenix MSA, AZ
Industry
Industrial / Flex
Industry
Industrial / Flex
Timeline
48-hour turnaround
Timeline
48-hour turnaround
A private buyer brought us an industrial flex listing marketed at a 7.4% cap. We rebuilt the operating statement from real expenses and verified income against public records.
Once true taxes, insurance, and management were applied, the real cap rate fell to 5.15% — and the deal no longer cleared the buyer’s return threshold.
A private buyer brought us an industrial flex listing marketed at a 7.4% cap. We rebuilt the operating statement from real expenses and verified income against public records.
Once true taxes, insurance, and management were applied, the real cap rate fell to 5.15% — and the deal no longer cleared the buyer’s return threshold.
Key Highlights:
A private buyer brought us a fully-leased 6,200 SF industrial flex deal marketed at a 7.4% cap. We rebuilt the income and expense stack from source documents before a dollar changed hands.
Operating statement rebuilt line-by-line from actual taxes, insurance, and management
In-place income verified against the leases and county public records
Reassessment-on-sale modeled to catch the post-close tax jump
Going-in cap re-derived on real numbers, not the marketed pro forma
Key Highlights:
A private buyer brought us a fully-leased 6,200 SF industrial flex deal marketed at a 7.4% cap. We rebuilt the income and expense stack from source documents before a dollar changed hands.
Operating statement rebuilt line-by-line from actual taxes, insurance, and management
In-place income verified against the leases and county public records
Reassessment-on-sale modeled to catch the post-close tax jump
Going-in cap re-derived on real numbers, not the marketed pro forma
Challenges
The marketing package leaned on understated expenses and a tax figure frozen at the seller’s basis — both of which would reset the day the buyer took title.
Key Challenge Points:
Property taxes marketed at the seller’s capped basis, not the reassessed value
Insurance and management understated versus comparable flex assets
A marketed 7.4% cap built on income the leases didn’t fully support
Challenges
The marketing package leaned on understated expenses and a tax figure frozen at the seller’s basis — both of which would reset the day the buyer took title.
Key Challenge Points:
Property taxes marketed at the seller’s capped basis, not the reassessed value
Insurance and management understated versus comparable flex assets
A marketed 7.4% cap built on income the leases didn’t fully support
Results
Once real operating costs and the post-sale reassessment were applied, the going-in cap fell from a marketed 7.4% to a true 5.15% — below the buyer’s return threshold. We returned a Walk Away before the deposit was wired.
Results:
225 bps of cap-rate overstatement identified
Roughly $44K of annual NOI removed from the seller’s figure
Negative leverage flagged against the quoted financing
Verdict delivered in 48 hours: Walk Away
Results
Once real operating costs and the post-sale reassessment were applied, the going-in cap fell from a marketed 7.4% to a true 5.15% — below the buyer’s return threshold. We returned a Walk Away before the deposit was wired.
Results:
225 bps of cap-rate overstatement identified
Roughly $44K of annual NOI removed from the seller’s figure
Negative leverage flagged against the quoted financing
Verdict delivered in 48 hours: Walk Away
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Related Case Studies
See
How
We
Re-Underwrite
Every
Asset
Class
Browse more deals we rebuilt from the ground up — each re-underwritten to a clear Proceed, Conditional, or Walk Away verdict.
