Feedback on Profitability on a Commercial Development in West Africa

[Alexandre Boustany]

Hi Bigger Pockets Community!

I’ve newly joined our family business in developing commercial buildings and would appreciate your advice if the following potential project is considered as a strong long-term hold.

Project Summary:

• 40-year ground lease
• Initial investment: $USD 930,000 (which includes the 10 years of prepaid land rent and all other costs  such as permits, contracts, engineering, geotechnical studies, etc.)

Revenue & Occupancy:

• Annual rental revenue (Year 1): the equivalent of $USD145,000 (at 100% occupancy)
• 7% shop rent increase every 5 years

Operating Expenses:

• Recurrent yearly expenses total USD$20,000, covering: Security, maintenance, generator upkeep, insurance, taxes, repairs, and contingencies
• Land rent restarts in Year 11 with a 10% increase every 10 years

Financing:

1. With loan (USD$550,000 at 7%, over 6 years)
   → Break-even in Year 12

After breakeven, the project produces pure cash flow for 28–32 years.

Would you consider this a strong long-term hold?
Would you use debt here or propose a different financing strategy?

Appreciate any advice, feedback, or red flags I might have missed.

Thanks a lot!