I've been at 100% occupancy for my small spaces for the past 5 years.My only feedback is that $2 per month per sq ft NNN seems really high to me, but each market is different. 

@Marc Shin We have used small baskets of the trash can size to make them look more upscale.

If they have the ability to purchase the note, why can't they just buy it directly from the bank?

Although I’ve been investing in real estate, both directly and indirectly for 45+ years, I still get a “queasy” feeling when an investment does not perform as expected.My “aha” moment occurs when we reach the point when, despite the investment problems, we’re able to still show a good/substantial profit at the end of our holding period.  

Note ADUs do the opposite seeing that small units in small counts is very expensive development.I see nothing in anything you have stated that addresses what i believe has to occur to accomplish your goal. 

They were lucky to get out breaking even or a small loss.

Of course it is always a balance between rate and occupancy.I probably will never do it , but often dreamed at one time about buying a small hotel. 

Addressing Housing Demand -California’s housing shortage is well-documented, and SB 9 directly targets the problem by promoting small-scale, incremental density increases.

Quote from @Richard Kim: I'm a fairly new small time out of state investor who owns a couple multi-family properties in Cleveland.

However, everyone involved would need to meet the IRS requirements for a 1031 exchange.Finally, regarding transferring an individual property from the partnership to a member directly, this could be tricky.