Just bought 93k SF in downtown Fayetteville, NC. What to do!?

[Mika M.]

Closed on 93k sqft last week in downtown Fayetteville, NC and was approached with a higher offer ($4M) after closing. Not sure how to proceed.

Used to be a Sears retail space, then converted into a 3 story office space. The seller automated his business and has downsized from the entire building to needing just a lease-back of 5800 sqft at $15 NNN. We have another tenant that's likely to sign in the next week for another 11k sqft at $15 NNN. Both first floor, non-retail side.

Property perks:

- Opportunity Zone (doesn't help me though)

- Next door to new baseball stadium (can see the field from 3rd floor windows) and some new office space developed next to it

- New 300 unit multi just broke ground next door

- Part of Fayetteville's new downtown social district (open container until 10pm)

Two options:

1. Take the modest, but quick win and take the offer.

2. Convert the street-facing space back to retail and try to secure an anchor tenant. Lease out the 2nd and 3rd floors (~27k sqft each) as either office or possibly convert to something else. Open to ideas. The ceilings are high, so there is some room for options I think.

I should clarify that this is the first non-residential/multi-family project that my partner and I have taken on, so it's possible the inexperience is making me want to consider the offer. A follow-on question: if you were entering this asset class as mostly a novice and didn't want to make too many costly errors, what resources would you invest in? I'm even thinking to finding a consultant with experience doing conversions to help us decide on best steps forward.

[Kathie Russell]

Congrats! I know someone in Durham who does this kind of thing.  If you decide to keep it and proceed, i would be happy to connect you with him.  He is very generous about giving advice and helping people.