There are times that knowing “why not” is as or more valuable than knowing “why” to go ahead with a real estate transaction or opportunity. Some people are not willing to spend on research to explore a specific possibility, which actually can be a costly non-decision. The below linked article about the municipality of Fall River MA auctioning off a parking garage in need of renovation is a prime example.
As the article indicates, the City is willing to rezone the property. The structure needs renovation. Elements to research include the current makeup of the surrounding blocks, starting with whether or not there is still sufficient demand for a primary parking structure. If so, review current nearby parking prices and spaces within proximity. For example, if the area has 500 off-street spaces available at an average of $5 each per day, knowing whether or not those facilities sell out or always have plenty of spaces available should factor in the decision.
If you find a need for parking, determine the number of spaces available upon renovation and do a revenue projection at comparable prices. If there is not the demand for parking, research what types of offices, businesses, and/or residences are nearby. Run estimated demolition and construction costs for what you are considering. Upon finding potential cash flow, determine the most you would pay for the structure at auction.
The possibility exists that your findings will indicate it is not a worthwhile investment. One thing I suggest to my valued clients and connections is to explore your capabilities before dismissing your findings. Regarding the parking garage, suppose you have construction capabilities or work with investors that look at conversions or downtown properties. Bringing a project to another source with a way you and your team could be involved in the process could lead to a profitable opportunity.
Some of you are thinking, “If we don’t find anything we can do to generate revenue, our research time and money is wasted”. I would disagree. Having performed research to explore an opportunity which does not pencil out gives you solid reasons for turning down similar projects in the future. It also gives you in-depth data about what to look for doing future proposals. You would know, for example, that xx parking spaces are needed for a project you are looking into. You would have specific reasons to pursue or not pursue a project based on your internal findings. A competitor may be researching from scratch, and you can move on or move forward based on data you already have.
Being successful includes being “first in” on opportunities. Let’s collaborate!
( Here is the story: https://fallriverreporter.com/fall-river-puts-pearl-street-garage-up-for-sale-with-1-4-million-minimum-bid/ )