Office investment opportunity - Am I getting in too early?
I’m negotiating the purchase of a small (6,500sf) duplex office building in a relatively small market. Half is currently occupied by an engineering firm that is starting the third year of a three year lease. The other half is vacant and needs about $80k in buildout. The purchase price yields a 7% cap on just 50% occupancy. So there is significant upside IF I can get the other half leased up and IF I can get the existing tenant to renew at the end of their lease (or sign a new lease prior to closing). Neither of these things are a sure bet in the current market so there is obviously a fair degree of risk. But I would be picking this up at a fraction of replacement cost. I bought several of these type of properties between 2011 and 2014 when prices were depressed and did well on all of them. 

Am I getting in too early this time? Would love to hear questions or comments on this deal.
[{"id": "gkobe7e", "text": "If you're that close to releasing the space, make it part of the deal that you want a new 3 year lease signed before you're willing to part with cash.", "replies": [{"id": "gkpnbbv", "text": "Agreed. That\u2019s what I\u2019m going to do.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gkp1kgm", "text": "You could also talk to the seller about signing a head lease short term on the vacant piece as part of the negotiation.  Include a termination so you can still market it and pursue a new tenancy.  This may land with a thud depending on the motivations of the seller.", "replies": [{"id": "gkpnhzz", "text": "They wouldn\u2019t go for it because I\u2019m picking the property up at a massive discount. He might have agreed to it if I were paying their asking price.", "replies": [], "depth": 2}], "depth": 1}]