Hello Mike, It is nearly impossible to answer this question without taking a deep dive on the numbers of each but often times in expensive markets like Seattle the cost of construction is so high that it doesn't make sense to tear it down unless you can build something way bigger/nicer.

The sale proceeds likely won't fully cover my loan.I have a few questions: What documents will I need to complete the buyout of the first lender?

Yes. the original lender probably will not but a new lender may- there first question is gonna be what is your exit strategy so be prepared to answer that question.

Quote from @Andy Sabisch: Question . . .our leases have a NO SMOKING INSIDE clause. 

Does anyone have an example of what a contract should look like and the details in the scope of work?

I would confirm this with someone a little more well versed in NYC or give them a call to see if they can answer your questions.

Appreciation is very much possible, but my question to that is when do the markets reach their peak and prices start to soften up a bit. 

The biggest detail is look for a nationwide bank that is full delegated with little to No overlays.

Hi George,Great question!

Because I meet at the property and asked if he had any questions I caught it.