Expert: Dick Dennis - 4/10/2008

Question
I am considering a Washington DC co-op that has 50 years remaining on a land lease. The building (140 units) pays $14,000 a month in land rent. When is the best time to try and buy the land from the owner? What is the best strategy? How do you price the land? Any organizations that can help?

Answer
John, I would recommend you look up and contact a Realtor who is registered as a CCIM (Certified Commercial Investment Member). This is a person who is highly knowledgeable in commercial real estate investments and is highly educated and experienced. Look one up on the Internet who is close to you. Don't bother contacting any other Realtor.

You are aware, though, that the longer the leased property remains leased as it is, it very slowly appreciates as other investors are getting the same idea as you. On the other hand, the longer any of the lessees take to sell their interest in their unit, the less it will be valued . . . but not for about 30 years or so with those 50 years left. You asked for any organizations to help you. That is why I suggested contacting a CCIM who is experienced in co-ops, especially in your area.

I wish you well.

Dick Dennis