Converting a 4 Suite Office Building into Commercial Condos

[Melissa Kirk]

I'm considering purchasing a commercial office building that has 4 suites.  My own business currently leases one of the spaces.  I would like to then convert it into a commercial condo. I know I would need to establish an association with declaration, condo docs and such, get city approval and have a surveyor involved.  Once everything is completely set up, I would be interested in selling two of the suites, while keeping the other two. One to continue my business out of, and the other to retain for cash flow. 

Here are the numbers:  Purchase price to be between $500,000-$530,000.  I would make the purchase with a 1031 exchange, putting approx. $220,000 down, financing 8% on 20 years, payment of $2,593.  The building currently produces $5,300 a month gross and is fully leased. 

Does anyone have experience doing this?  I'm curious how capital gains would work with having rolled in a previous gain and then selling two suites while keeping the other two.  

If it matters to the conversation: I'm planning to sell my STR in Wisconsin Dells soon and roll that gain into this commercial building. Thank you to anyone who takes the time to respond.