Calculating PP with changes in State regulations
I have an interesting question for everyone! I am looking at a mixed use deal right now. The rents in the apartments are a good amount below market. The building has the ability to produce 140000+ in rental income with 72000K if that coming from one tenant (Aarons furniture rental) . This tenant rents about 7500SF. My questions/concern is my state has just put big restrictions on the way companies like Aaron's and Rent-A-Center do business. They felt these companies were taking advantage of the low income population. My fear is that these new restrictions will make it so Aarons does not renew their lease in the future and then I am left with 7500SF of commercial space empty and 72K less in income.
My questions is how would you go about factoring this possibility into your analysis? and does this change the way I calculate my purchase price?