Need help with commercial rent by the square ft. - Posted by Julia Anne

Posted by Julia Anne on January 03, 1999 at 10:04:10:

I am preparing to make an offer on a 5000 sq. ft. building in the downtown area of our capital city, one block from the courthouse, that is leased mostly by lawyers. The utilities (avg. $785 a mo.) are included with the present leases. (I would have to change that!). The conference and library areas and the 750 ft. of basement storage are free to all. My question is, given the present gross of $3500, making the rent less than a dollar a square ft., is this an unusually LOW amount?? With 5 tenants in place now the cash flow would be barely $100 after the utilities are paid by the owner. With a proration of utilities and 2 more tenants the cash becomes much more interesting. What kind of problems could this purchase stir up for the tenants and myself?