No Rent Roll. No Financials. I Sent a $16 Million Offer Anyway.

WELCOME TO THE PATRIOT DEAL ROOM, Issue No. 04

No rent roll. No trailing financials. A unit mix, a site plan, and a seller who paid $15,000,000 for this flex park barely a year ago.

Most groups pass the second a seller says no to financials. I sent a $16,000,000 letter of intent instead. The seller countered at $19,000,000.

I am not moving off my number today. I am also not walking away. This is a seed, not a close.

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Deal Snapshot

What I Liked

A real, diverse tenant base already paying rent. Across roughly 95,000 SF: a fitness studio, an auto detailing and coating shop, an apparel operation, a security and retail supplier, a liquidation wholesaler, and an indoor sports-training tenant in roughly 17,000 SF. Real small businesses running real operations, not a spreadsheet story.

Chunky vacancy, not scattered vacancy. The roughly 59,000 SF of empty space sits in eight blocks, three of them a full 9,000 SF each. That is a handful of larger leasing events to stabilize this park, not fifty small ones. Scattered vacancy is a leasing job with no end. Concentrated vacancy is a plan.

Real scale in one transaction. Thirteen acres and more than 150,000 SF in a Fort Worth-adjacent submarket, sourced before it hits a marketed process. Assembling this much small bay one building at a time could take years.

An exact unit mix. Roughly 60 suites with real square footages. That is the raw material to build my own stabilized rent roll from the ground up, which matters enormously when the seller will not show me his.

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What I Didn't Like

No financials, by design. The seller will not produce trailing income or expenses. Not "we are gathering them." Will not. Every number I have about how this park actually performs today is a number I built myself.

The condo-conversion story. The seller's plan is to condo out individual suites and sell them off one at a time at a premium. I do not believe it. This is the same tenant profile as every other small bay park I have owned: auto shops, a fitness studio, a liquidation wholesaler. Those operators want to know their rent number. They do not want an HOA, a reserve study, and a mortgage on a 2,250 SF bay.

Two uses with zero lease detail. An active oil-operation pad and an industrial outdoor storage use sit on this site and I have no terms, no remaining term, and no environmental history on either. That is a real diligence item to solve inside a purchase agreement, not something I can solve from the outside.

A basis that already tells the story. The seller paid $15,000,000 thirteen months ago, is reportedly losing money every month since, per the brokers, and is now asking $19,000,000. That is a 26.7% markup over his own basis on an asset performing worse than when he bought it.

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Seller Motivation Check

Per the brokers, the seller is bleeding cash on this asset today. I confirmed the one number that matters most independently of anything they told me: he bought it for $15,000,000 in 2025.

A seller who paid that a year ago, is losing money every month since, and is asking $19,000,000 anyway is not negotiating from urgency. He is negotiating from a story he still believes will bail him out. I do not think it will.

No forced timeline is visible yet. But a seller carrying a lame duck property has a clock running whether he admits it or not, and I expect that clock to do most of my negotiating for me.

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Read the (Partial) P&L Like an Operator

There is no rent roll to scrub here. So I built one.

What I do have is an accurate unit mix: roughly 60 suites totaling roughly 155,000 SF, roughly 95,000 SF occupied by a real tenant roster, roughly 59,000 SF vacant in a handful of large blocks. I underwrote a stabilized rent roll off that unit mix at market small bay rents for this submarket. Not a number anyone handed me.

That gets me to a stabilized NOI of approximately $1,250,000 across the roughly 150,000 SF of leasable building area. That figure is Patriot internal underwriting, not seller-reported income.

Here is what it does to each price on the table:

1. At my offer: $1,250,000 stabilized NOI / $16,000,000 = 7.81% stabilized yield.

2. At the seller's counter: $1,250,000 stabilized NOI / $19,000,000 = 6.58% stabilized yield.

3. At the seller's own 2025 purchase price: $1,250,000 stabilized NOI / $15,000,000 = 8.33% stabilized yield.

Read line three again. Even the seller's own basis pencils better than what he is asking me to pay for it today. He is asking me to underwrite worse than he did, on an asset that is performing worse than when he bought it.

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Why I Landed at $16 Million

Sixteen million dollars is built from my own unit mix and my own stabilized rents. Nothing in that number came from the seller. That is my ceiling today, and it is also the price of admission: a signed LOI is what gets me inside a purchase agreement where the real financials finally have to show up.

The seller countered at $19,000,000. He wants a premium over his own thirteen-month-old basis for a business plan I do not think a single tenant in that park would take him up on.

I am not disappointed. I expected an unrealistic first counter, because this seller is not motivated yet and no amount of underwriting on my side changes that. What changes it is time. A seller bleeding cash every month on a plan that depends on tenants who do not want to own their suites does not sit at $19,000,000 forever. I expect that number to walk toward mine. Depending on how the vacancy and his cash flow move between now and then, mine could move too.

Nothing is signed. This is a seed, not a close.

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The Lesson

This is what off-market sourcing at this size actually looks like. Not a broker call that turns into a clean rent roll and a fast close. A seller who will not show you the numbers, a business plan you do not believe, and a first counter that is not close.

‍Three Questions Every Small Bay Investor Should Ask

What do you do when a seller refuses to provide financials?

Build your own model or walk. Do not accept a verbal income figure as a substitute. An accurate unit mix plus market rents for that specific submarket gives you a defensible stabilized NOI you can underwrite against. The refusal itself is also information: it usually means the trailing numbers are worse than the story.

Is concentrated vacancy better or worse than scattered vacancy?

Concentrated is usually better in small bay. Fifty-nine thousand square feet sitting in eight blocks is a handful of leasing events you can plan, staff, and finish. The same square footage scattered across thirty small suites is a permanent leasing operation with turnover costs attached to every one.

How should you value a suite condo-conversion story?

Test it against the tenants who are actually in the building. Condo conversion asks a small business operator to take on ownership, an association, a reserve study, and a mortgage on a single bay. Most tenants in a working flex park want a rent number and a roll-up door. If the conversion premium only works on paper, price the asset on its rental income instead.

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Verdict

A 155,000 SF flex park in a Fort Worth-adjacent submarket, 62% occupied, with no seller financials and a condo-conversion business plan I do not believe. I underwrote it at a stabilized NOI of approximately $1,250,000 and offered $16,000,000, a 7.81% stabilized yield. The seller countered at $19,000,000, a 6.58% yield on the same NOI and a 26.7% markup over the price he paid thirteen months ago. I did not raise my number and he did not withdraw his. The deal is alive, the gap is $3,000,000, and given where this market sits, closing it is a real possibility rather than a long shot. I will tell you how it plays out.

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Disclaimer

This analysis reflects Patriot Holdings' independent underwriting assessment based on information available at the time of review, including the broker's offering materials and our own market experience. Our assumptions, projections, and conclusions may differ from those of other qualified operators, investors, or the seller, who may possess material information not available to us. Reasonable professionals can and do reach different conclusions when underwriting the same asset. This content is shared for educational and informational purposes only and does not constitute investment advice or a judgment on the seller, the broker, or any party involved in the transaction.