Purchasing 11k sq ft office building; would appreciate input

[Jeff Abel]

I'm an attorney here in Austin, need about 5k-6k sq ft for my office and am planning to purchase/build an office building.  I've been vetting various deals, and have an offer in on an 11k office building. I'm done with renting, and am in a position to purchase.  Here are the numbers:

Current rent (7700 sq ft) 21k/month, about to be raised to 28k month ($27/sq + NNN) in the Arboretum

Building identified and trading paper, purchase price 2.5MM north of the Domain

Renovation of my suite, new facade and possibly new windows in my suite: 500k (need to verify with architect/contractor) based on roughly $100/sq

Building 50% occupied, only 1 with long term lease.  Current owner wants to stay in building; all tenants are medical.  

Rents run about 21 +NNN, and all tenants can be relocated to 5500 sq ft first floor (I will take the entire second floor)

At a cap rate of 7%, the building fully leased would be valued at 3.3MM. I'll be looking into putting it into a REIT at some point (I need to learn more about this approach). Paying myself 21/sq +NNN, combined with the other rents and a bank loan for 80% of the project (2.4MM) I can save quite a bit off my current rental expense. My financing is set up.

My questions:

This is my first commercial deal, what big things should I be looking out for?  

Since I'm not building, I don't have zoning, tree ordinance, extended permitting issues.  (prior I was looking at 6306 McNeil, and unfortunately the owner wants too much and fully developing 4.5 acres as my first commercial deal was a bit daunting).  I also looked at the parcel on Kawnee by St Johns West.  I think it needs to be multi family b/c parking would be tight for office even with the reduced parking allowance based on TOD MU.

I have an idea of improving this building, getting it fully leased, then looking to develop another property.  I like what Darryl (sp?) did with Springdale General and it appears he's doing 826 Houston St with Hsu as the architect.  I like the open floorplans, glass and metal based on barn construction.  I'd love to start a dialog with folks in Austin who are interested in mixed use and office space.