$$Another Mixed Use Question$$

[Cornell M. Dayne]

This property is a heavy industrial warehouse and office space. Again motivation is there. The Building and trucking parking lot is partially leased with a lot of the leases being to smaller local companies (hard to get info on them) with leases set to expire in the near term, ie 6 months and 1 year. Some of the lease are longer term ie 3 years.

By the way the building is NNN along with CAM charges. There are also some other opportunities to boost income since the owner uses parts of the building for itself and the building is not fully leased.

The Office portion makes $209,000 per annum.
The manufacturing/trucking portion makes $322,000 per annum.

The thing that bothers me about this deal are the uncertain, shaky leases. I would not want to get in there and find out that the owner just put a bunch of companies in there that couldn't pay rent. One tidbit I forgot is that the owners purchased the property vacant.

The owners are amenable to selling the office building by itself and vice versa.

How would you guys approach a deal like this?

Is there anything missing in my analysis?

**The loan is assumable by the way

I am leaning toward a short term master lease (18-30 months) because I want to get in there and stabilize the property with no risk to myself. I also doubt that the bank will like the fact that the lease albeit NNN are short term leases.

What would you do and how would you analyze it?