Medical suite...14% cap rate?
Hi BP'ers! Looking for some advice about a pocket listing sent to me the other day. I don't have much experience with the Commercial REI realm and would appreciate any advice. This is a 3,000sqft medical facility that would be classified as Class A office space, I believe. Here our the numbers forwarded to me from the Property Manager. The purchase price would be under 300k and they will entertain seller financing.
52 months of rent remaining (based on 12/1/14 Settlement date) $195,000
52 months of NNN costs @ $2/SF (estimate) - $26,000
Net cash flow - $169,000 over 56 months - 63% of the purchase price repaid over the next 52 months
Buyer's cost basis after the lease ends - $99,900 of purchase price not repaid - $33/SF
3,019 SF fully built out medical suite specifically set up for dialysis practice
Average monthly rent of $3,750/month
Average monthly NNN costs - $500/month
Average net cash flow - $3,250/month
Cap Rate - 14% on average net cash flow
Please let me know what you all think or what your next move would be with the seller. Thanks!