Converting medical office building into small offices

[Bharath Raj]

I own a 5100 sq ft medical office space with no restrictions near the University of Houston. I have inherited a tenant who has 1450 sq ft for the next 5 years. This area is turning and there are new businesses sprouting everywhere. My current competitor is the guy next door with a similar building which is already built out fully (Texas children' outpatient office used to be here for a decade). My building is 1750 sq ft built out, and the remaining 1850 sq ft is shell space. I am not a stickler for putting in another medical office in this building. I wanted to explore the possibility of creating several small office spaces with a common reception area and CAM. In order to run my numbers right, I wanted to ensure that I count everything. Here is my list of costs. Please critique

1) Insurance: I have a insurance policy for the whole building. Do I need any other kinds of insurance?

2) I currently have a common area parking and access arrangement with my neighbor for the parking lot and landscaping that we share. I plan to pass the cost to my tenants, proportionate to the sq ft of their office spaces (variable per tenant) and the common area (fixed amount of area)

3) Electricity

4) Water

5) Internet

6) Receptionist fee

7) Telephone

8) Conference room maintenance: Do I need to set up a projector? What are the elements that go into a decent conference room?

9) Break room maintenance: How do I decide what to stock and how much?

10) Restrooms maintenance & common area cleaning

11) Is there a way to recoup the initial built out costs that I would have to absorb to make this work? 

12) Since this office space would be in the 3rd ward in Houston, I would appreciate any local input also. 

Thank you.