Office investing

[Jimmy H.]

Haven't been able to find any threads dedicated to offices and i'm sure some of you have experience investing in them. I am interested in commercial RE - even though the talking heads have said "commercial is the next shoe to drop" I don't think the residential shoe has fully dropped for that matter.

I am interested in a class B office space just off the main artery (road) in town. It is on a corner lot, plenty of parking, three story - no office condo crap they've been developing. Office rental rates in my town are $10/sqft for the loweliest dinkiest spot you can find and $17+ for Class A new construction. The problem is obivously that small business is hurting, so even some Class space downtown is edging down below $15 towards $12 in order to fill vacancies. My thought is that I could get $12/sgft for this spot and even being super conservative in my estimates, I could take $10/sqft and still cash flow.

Building is three stories with about 4 suites per floor (can be divded up different ways), and a total of 25,000+ sqft of rentable space. asking price is $2,100,000 and it undoubtedly needs sprucing up and painting, etc. but not in bad shape - just a bit of cosmetics. I'm looking at around $10,000 per month debt service on a 30 year am and $12,000 debt service on a 20 year am. even at a conervative $10/sqft my revenue is over $20,000 per month, and probably close to $10,000 cahs flow after debt service (hoping i can get a 30 year am). It is currently 100% occupied.

For you experienced investors out there, what am I missing, deal or no deal?