33% occupied because of existing tenant? - Flex Industrial

[Jim Pylman]

Hello Everybody - So here is the situation... I found an Off Market 15k sq ft industrial building here in Northern California. Its made up of 3-5,000 sq ft units of which only 1 is currently occupied. I originally contacted the owner because I noticed 1 unit went vacant(the back unit) and then a few month later the middle unit followed suit. Its now been 4 month and the current ownership says they've received little interest in the vacant units.

Here is what I think is going on! Unit #1 ,which is the frontage unit, is occupied by a Recycle Company that take in bottle and cans from the public. I have sat in the parking lot many times watching the comings and goings of a less than desirable crowd of folks some of which are homeless needless to say. Now I don't want to come off as a **hole.. I think that recycling is great and people have to make a few bucks here and there but I cant help but think that their presents steers any professional prospective tenants down the road! So here's the real question..

 If I close this deal, do I evict my ONLY tenant and start with a totally vacant building? If I do this, I would need to fill 2 units within the first 4 months or I would face a zero cash flow situation for the 1st year. I know the area and I feel confident in this market but the unknown has me on edge. By the way this would be my 1st Commercial deal so I am approaching everything cautiously. I would love to hear any suggestions.