Are basement windowless offices rentable?

[Frank M Hurdle]

I have a five-story warehouse with about 10,000 feet per floor that I bought at a tax sale several years ago. I had it sold several years ago but there was a title problem, which I fixed, but haven't been able to get it sold again. For the past several years the building has had a single storage tenant, paying $1,200 for the use of a single floor.

My current tenant is going to be moving out at some point. I've decided to carve up the building into large "mini" storage units using eight-foot cyclone fencing with privacy mesh, with unit sizes ranging from 375 to 1,500 square feet. I'm going to only develop one floor to start and the cost will be pretty cheap. I'm going to be able to profitably rent out space for a third to half what other mini-storage places are charging. The former owner also stored cars during the winter, so I'll likely devote a floor to that. The only downside to this plan is that I will have to hire someone full time to be on hand to operate the freight elevator. It will be a dream job, though, as I figure 90 percent of their time will be spent watching television.

The basement of this building also had warehouse space and is served by the freight elevator, but at some point 30 or 40 years ago it was cobbled up into a rabbit warren of offices. A third of the building has what I would call a unified office of about 3,500 sq. feet with several rooms and a rational layout; this was leased out at $900 per month when I took possession of the building and they stayed for a couple of years. The remaining 6,500 sq. ft. is what I call the rabbit warren, with about 11 offices ranging from 200 to 800 sq. ft. plus office-style bathrooms and a small kitchen. Almost every office has what I would call a shallow "closet" with bi-fold doors that looks like it was designed to allow the storage of files. One of these offices is situated such that it could be a conference room.

The entire place looks a little sad. A lot of the carpet was removed due to a burst water pipe. The acoustical tile has a dingy brownish look in spots and needs to be replaced. Some of the florescent lights flicker and buzz. I think it will cost about $20-25 thousand to fix everything up so it looks reasonably nice.

I have two options. My first thought was just to slap a padlock on all the offices and rent them as climate controlled storage units. There would be a lot of wasted space. I then thought I might be able to fix the place back up and rent out the offices at really cheap rates. I can make money renting out the offices starting at $200 per month, although I'd like to get more. There are for or five steps going down into the basement with a motorized chair lift thingy, so it should be ADA compliant. My only hesitation is the fact that there simply are no windows anywhere except the entrance to the basement (there are fire exits). Contra, this property has been rented in the past. 

Any thoughts on this? The warehouse is located in the downtown district of a city of 25,000 in the Mid-west. The city is a commercial center serving about half a dozen counties. The average temperature is 50 below zero, or so it seems, so basement offices would be relatively cheap to heat in winter, which is definitely important.