LOCATION: 4221 50th Street, Drayton Valley, Alberta
PURCHASE PRICE: $3,000,000
DATE PURCHASED: January 6th, 2020
CASH ON CASH RETURN: 8.4%
COMPOSITE RETURN: 14.6%
TENANCY: Home Hardware
YEAR BUILT: 1996
FOOTAGE: 21,878 Sq. Ft.
JOINT VENTURE: Safety First Projects 9 Ltd.
A long time Commercial Realtor® friend contacted me in the fall of 2019 and asked if we would consider an acquisition on a commercial property in Drayton Valley. After discussing what the nature of the property is, a Home Hardware and Lumber Outlet, we agreed to drive to Drayton Valley to inspect the property. The owner of the property is a long time friend of the Realtor® and, although the owner had not listed the property for sale, he wanted to look at the prospects of selling the property.
We met with the owner and discussed the probability that a Section 85 purchase treatment may be feasible. The owner of the property ultimately chose not to look at a Section 85 deal but did agree to look at a Letter of Intent. Within a relatively short period of time we moved on to a formal Offer to Purchase. The Due Diligence on the property considered the risk factor of Drayton Valley being primarily an Oil and Gas Industry town and found that the owner had adjusted the Base Rent of the property downward to realistically reflect the current sagging economy of Alberta. The results of the rest of the Due Diligence proved to be positive, a new mortgage loan was approved by CWB and we closed on the purchase effective January 6, 2020.