Lease buy-out

[Jimmy H.]

I have a bank property I am interested in. I know such an investment, with the majority of your tenants going to be banks, could be quite risky. I know federal regulators are trying to diminish the number of banks and thrifts from north of 10,000 to closer to 6,000.

Property is newer construction, 6 years old, listed at $1.9mill with a 11.5% CAP rate and a rate increase in a couple years to a 13% or so CAP. The bank is Integra bank, they have already vacated the property but must honor the lease for another 8 years. Upon purchase they would likely want to negotiate a lease buy-out. This would be worked out for the new buyer before the sale takes place.

I was wondering if anyone has experience with a similar deal.

I could probably get the price down from listing and the CAP isn't bad as is, the issue is getting it leased again.

Will there be big issues with financing in such a situation?
If I can get it financed and use some of the buy-out funds to pay some holding cost and get it leased again it could be quite lucrative. But that "reward" comes with an obvious risk.

The bank is in a great and growing area, new development, golf cours ecommunities, good employment and is in a good area on the main connector road.

What do you think?