I wanted to add something in a proforma I’m working on. Basically, I want to calculate that potential renters/buyers have a healthy business so they can sustain and stay in their building. I believe there is a stat for this, but I don’t remember.
For example, if there is a business owner looking to go into a 50,000 SF warehouse, and he pays $0.50/SF ($25,000/mo), what is the rule of thumb for the percentage of how much he needs to make to stay in that building — safely? Is there such an average or stat? How much does this stat change if it’s owner vs. renter, or does it change at all? I am specifically working on industrial warehouses.
In retail, there are a couple of metrics commonly used that gets to what you’re suggesting; ‘Tenant Occupancy Cost’ and ‘Tenant Sales PSF’. However, Tenant Occupancy Cost analysis is typically only used in retail since many retail leases include clauses that require tenants to report sales. The Ai1 does include a ‘Retail Analysis’ tab (make sure on the Summary tab that the Property Type is set to Retail and that the Report tabs is set to ‘Show’ under Naviation) that helps the user do this type of analysis.
In terms of adapting it for other tenant types, that I haven’t considered. If you wanted to take a crack at it, you should check out the post I wrote on this subject a while back:
