Industrial property North OC, time to sell?

[Account Closed]

I co-own an industrial building in North OC which is approximately 10K sq. ft. It is about 40 years old. The co-owner and I inherited the property a few years ago. The co-owner now wants to sell. She has indicated a buyout may be possible. After advising with various professionals I have yet to reach a decision on which would be the better choice.

The prevailing rent in the area is around .95 sq. ft. Sales are around $190 sq. ft. So, my choices are to sell and gross $800,000 to $1,000,000 or try and buy out my partner at around the same cost, financing would not be necessary...

The potential listing agent (and leasing agent) has been adamant that my capitalization rate would be around 4-5% with the buyout and thus, a poor investment. They advise that rents probably won't go up much more and that most tenants are looking to purchase. The vacancy rate is below 3%. Wouldn't value and demand also be a factor?

I am inclined to keep the property due to the familial lineage and ease of maintenance. If I do sell I was considering investing in residential and/or vacation properties but the maintenance and attention necessary make me appreciate the simplicity of industrial property. 

Another consideration is that the tenant is vacating the premises in 4 months. potentially affecting the marketability and financing.

Also, there are some differed maintenance issues but these should be one-time expenses (consummate with a new tenant). The property is self-managed.

I'm having a hard time seeing how the cap rate and long-term value make this a "poor investment". Am I missing the big picture here and are there better options? Thanks for any pointers, as a complete neophyte any direction or insights would be appreciated!