We are acting as our own GC, with her being my eyes and ears on the ground. 

Well, a question like yours is indicative of a highly refined pallet, inviting an answer that goes something like this:I say you go for dried cherries (which in REI terms might means something like REIT or S&P).Now, to get a more specific answer, care to ask a more narrowly defined question?

This dirt compacted very hard under minimal water sprinkling and had standing water for 5+ hours in full sun 85 degree weather (beneath the standing water, the dirt was relatively dry - so it was holding water, not draining at all).  

This dirt compacted very hard under minimal water sprinkling and had standing water for 5+ hours in full sun 85 degree weather (beneath the standing water, the dirt was relatively dry - so it was holding water, not draining at all).  

[No coverage for] Water below the surface of the ground including that which exerts pressure on or flows, seeps orleaks through sidewalks, driveways, foundations, walls, basement or other floors, or though doors,windows, or any other opening in such sidewalks, driveways, foundations, walls or floors;...Wear and tear; marring; deterioration; inherent vice; latent defect; mechanical breakdown; rust; mold;wet or dry rot; contamination; smog; smoke from agricultural smudging or industrial operations; settling,cracking, shrinking, bulging, or expansion of pavements, patios, foundations, walls, floors, roofs orceilings; birds, vermin, rodents, insects or domestic animals.

Such as tax preparers, sandwich shops, etc.... that will really suffer if traffic volume dries up.If this is his thought on this, it comes down to preserving the "Asset Value" of the shopping center through tenant mix.Storage units seem to be low volume traffic draws compared to a Home Depot or something like that.

Or has the market dried up with newer homes already?

Looks like it needs flooring, paint, countertops, cabinet refinishing (or replacement), roof repair, dry rot repair, maybe foundation repair, lots of wall repair, and possibly plumbing/electrical repair (nothing can be seen in the photos but common in that area).I agree with @Dylan Vargas that there is no money to be made in flipping this property based on your numbers. 

Double check, but it seems like a pretty cut and dry breach of contract case. 

I have conducted a  dry listing to see if I could get interest and was able to 8 applications in 24 hours before I removed the listing at a rate of 700$ per room.