Are you buying restruant itself or the real estate?

If you are buying the business itself, right now the value is close to 0, well, take it back, other than the commercial grade equipments.

If you are buying the real estate-the building itself then it seems a good deal. You can always back out within contigency period and once you have appraisal back you can tell if it is worth the price or not.

Also you need to find out how much does it cost you to fix up the place and what is the conservative rental income for this location. (Don't assume you can get same rent as the peak time...)