Marquis mixed use retail/restaurant/office analysis help

[Marcello Di Gerlando]

Take a look at the details below and please give me your opinion using CCIM/Rule of thumb/beer-math/inter web BP analysis and tell me if this deal is worth a closer look or should I shelve it without a second though. Much appreciated.

I'm looking at purchasing a marquis building in downtown Colorado Springs. Currently a crappy sports bar with no cool factor at all which has been operating miserably out of this space for as long as I can remember. The building is a former haberdasher/clothing store with 1900 charm. There was 2004 remodel that updated mechanical, electrical and sprinkler systems. It has a kitchen and a liquor license. 2 floors of lease space. I anticipate sub dividing and remodeling to incorporate mix retail/office and bar-restaurant spaces with a lot of cool factor; multiple tenets. I'm not interested in operating a business out of there myself. I'm simply interested in this space for the real estate potential.

16,000sf downtown marquis building asking $3MM. 

I'm anticipating a $1.2MM remodel and a 1yr holding costs of 250K. 

30% equity position with down payment on on the full $4.2MM. (Building plus rehab)

After rehab lease space should average $25sqft NNN. With the potential to ask for $50sqft NNN.

ARV once fully leased. $5MM

happy to share more info. let me know what metrics and details you need.

Thanks 

Marcello