Renovating and subleasing offices

[Valhalla]

In my immediate area, in a growing 60,000 pop. town, there are about 6 commercial/office spaces ranging from about 1200 sq ft to 3000 (with finished walls, and flooring but otherwise gutted) that have been sitting there empty advertising lease availability for 2+ years. At the same time, there is also unmet demand for good, small office space, those that are available (and in good shape) are snapped up quickly at relatively high prices. With my wife being an office designer by trade-I'm sure you all see this coming- my thought is to lease the space with a tenant improvement allowance and sublet rights, invest in creating a space that is appealing and sublease the 'new' office. After doing initial research and running some quick numbers, this feels like a potential winner which could provide some solid, passive cash flow without a large capital commitment. It's been done on a larger scale in bigger markets and it feels translateable to here with small businesses and solo practitioners.

What am I missing?

 

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