Showroom Industrial - How is this Sub sector?

Hi
I am analyzing an industrial property in LA metro, roughly a third of the footage is Industrial showroom (We are an LP). The showroom units are facing a busy street and are occupied by classical tenants to my understanding (a B2B business, that needs to show the products being sold). The area is very strong demographically. Rent's on the showroom space are being UW in 15% premium to the regular industrial space.

  • First time for me seeing this type of property. Any general sector review / analysis to refer?
  • Generally speaking, would love to hear some feedback on this type of property.
  • On a rule of thumb basis, does 15% premium make sense to regular Industrial space?
  • What kind of discount should showroom have to retail units in the area?
  • Do you view this as retail risk?

Thanks a lot!

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