Five phases. Most people never get past the first one — which is exactly why it works for the people who do.
A company needing space sees what is listed for lease. So does the broker they hired. In most markets that is a fraction of the buildings standing.
Think about what that excludes. Every building that is for sale but not for lease. Every owner-occupied building whose owner is retiring. Every property where the seller wants out entirely and has no interest in becoming somebody's landlord.
Those buildings are invisible to a tenant, because there is no mechanism for a tenant to reach them. A company that needs fifteen thousand square feet is not going to buy a building — that is not their business, and their CFO does not want capital tied up in real estate.
You are the mechanism. Give me the specification, I will find the building, I will buy it, and we structure a lease at a number you can actually pay. You are not another landlord competing for attention — you are the only person offering access to buildings they structurally cannot reach.
The order is the whole method. Reverse it and you are just another buyer hoping to fill a building.
A company with real credit that needs space in a market you can reach. You own nothing yet, so you risk nothing but your time. Nine out of ten people never get past here.
Contingent on you acquiring the building. Now you hold contracted income from a creditworthy company rather than a hope and a spreadsheet.
Unleased, at a price that reflects it being empty — because to the seller it is. You already know what it will be worth the day your tenant moves in.
Three documents: contract, lease, pro forma. The bank underwrites the deal and the tenant far more than it underwrites you.
Twelve months of performance, then refinance against appraised value instead of what you paid. That is where your capital comes back to go again.
An appraiser valuing a leased single-tenant building leans on the income approach. The lease is what creates the value — which is why it comes first.
Say your tenant pays $10,000 a month. That is $120,000 a year. At a 9% cap rate, that is $1,333,333 of value — and that number, not what you paid, is what the bank lends against.
An appraiser does not use gross rent. They use net operating income, and they deduct even on a triple net lease: vacancy and collection loss of 2–10%, a management fee of 2–5% applied even if you manage it yourself, and reserves for replacement.
Same building, honest numbers: $120,000 gross becomes roughly $108,400 net, and $1,333,333 becomes $1,204,444. Nothing about the building changed.
Once at gross rent, once with 5% vacancy, 3% management and a reserve allowance. The second number is the honest one. If your deal only works on the first, you do not have a deal — you have a spreadsheet.