A Tesla Service Center in San Antonio, Texas goes up for $4.75-million, but is it a sign that Tesla is going down? No and read more on why.
A press release from B+E, an investment brokerage firm in New York, NY, came out with an interesting headline. “Tesla San Antonio Service Center Location for sale at $4.75-million.” The building is located at 23011 IH-10 W, San Antonio, Texas and is the only Tesla Service Center for 100-miles. Now, if you’re someone always looking for bad news about anything and everything Tesla or Elon Musk, this story won’t make you happy.
A Tesla Service Center for Sale?
Then again, if you’re a Tesla fan but don’t know what’s going on, you could be worried. So, to find out more, I reached out to John Vita of John Steven Vita Communications and Spencer Henderson of B+E Net Lease. Turns out, it’s nothing to sweat over if you’re a Tesla owner in San Antonio. However, don’t be surprised if what you hear is spun the other way.
The thing is what’s happening is common for many properties where businesses are located. It’s rare when the building and land are owned by the company on the side of the wall. Especially so for something that needs this much land and this size of a building (12,647-sq-ft).
What is an Investment Property?
After talking to Mr. Henderson on the phone, the property and building aren’t owned by Tesla but someone else. It is an investment property and Tesla is just the tenant. It started life as someone’s personal garage originally built in 2002. Tesla then approached him in 2016 to renovate it into a service center. There wasn’t one in San Antonio at the time and the owner agreed but remained the landlord of the property. Meanwhile Musk’s American electric vehicle company rented it while also paying the taxes and utilities.
The Advantage of Owning a Tesla Rented Property
The Tesla Service Center isn’t leaving the property. If you come up with the $4.75-million to purchase it, you become the new property owner while the service center remains and pays the rent. Now, if Tesla leaves, you’ll need to find a new tenant for the building, but you’ll have seven Tesla Superchargers available, solar power is already installed and working, and won’t be an added investment. So, you can look at that as you choose to.
“This an outstanding investment opportunity in the income tax free State of Texas,” said Mr. Henderson. “The property has amazing visibility off of IH-10 leading to downtown and experiences average daily traffic counts of (around) 87,000. Additionally, the subject property is the only location to service a Tesla within 100 miles of San Antonio.”
Tesla Most Likely Will Stay with You
There is an advantage with this property and having Tesla as your tenant: they are very unlikely to move out. According to the listing as well as Mr. Henderson, “After two failed attempts to enter the San Antonio market at other locations, the San Antonio Zoning Commission finally the approved Tesla’s plan to operate at this site. Due to the challenging approval process, it will be difficult for them to relocate.” You also won’t be paying income taxes as the owner since Texas is an income tax-free state. Many other states will charge you income tax, among other taxes, for being a property owner renting out your land or building.
So, if you’ve got that $4.75-million, you could be the owner of a Tesla Service Center, well, the owner of the land its on with them paying you rent.
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