Developing empty shell to lease to physical therapists, advice ne

[Igor S.]

Need advice,

I bought an empty shell space ~ 1.5 yrs ago and it's about 4,450SF. I am meeting a couple of physical therapist guys next week who have 4 locations already and are expanding and are interested in renting this space from me. Does anyone know how much per SF are the build out costs for a PT office in East Tennessee? I was thinking about charging them $21/SF/YR rent (Modified Gross) with a $50/SF tenant improvement allowance. I'll have to take a 10 yr bank loan out for it. I will also need a 10 year lease contract with them for the numbers to work out. I do not want to allow them more than they truly need for their build out.

2) Anything I should be aware of? Any words of wisdom? What are acceptable % annual increases if any? I was thinking about holding the rent steady for the first 3 yrs, then maybe 2% annual increases until year 10? Is that fair? Any advice?

Much appreciated,