Freestanding Flex Space with
For Sale
Contact for pricing
1085 Bailey Ave, Chattanooga, TN 37404
Freestanding commercial property combining office accommodations with below-grade warehouse space and I-H heavy industrial zoning.
Property Size4,280 SF
Price / SF$223.25
Days on Market116
Property Features for 1085 Bailey Ave
General Information
Standard status
Active
Size
4,280 SF
Property subtype
Office, Industrial, Mixed Use
Zoning
I-H
Warehouse & Industrial
Warehouse Space
4,280 SF
Office Build-Out
4,280 SF
Additional Details
Road Access
Yes
Building Details
Year Built
1948
Buildings
1
Stories
1
Listing Agency:
Tower Property Group, LLC
(423) 432-2990
Listed By:
Bradley Stern · License #TN 383124
Source:
Crexi
Added: May 7
Changed: Aug 30
Last Checked: Aug 30 at 2:04AM
Displayed information is deemed reliable but is not guaranteed and should be independently verified. All listing content including descriptions, pricing, images are the copyrighted material of Tower Property Group, LLC
Investment Insights
Based on property information with market context.
Built in 1948, this freestanding flex property combines 4,280 +/- SF of office space with an additional 4,280 +/- SF below-grade warehouse. The configuration supports a range of office, retail, and industrial applications, with exterior access serving the warehouse area. On-site parking is included.
The property is positioned along the Bailey Avenue corridor with access to downtown Chattanooga and major thoroughfares. I-H heavy industrial zoning provides the governing land-use designation for the site.
The property is positioned along the Bailey Avenue corridor with access to downtown Chattanooga and major thoroughfares. I-H heavy industrial zoning provides the governing land-use designation for the site.
Key Highlights
- 4,280 +/- SF office space
- Additional 4,280 +/- SF below‑grade warehouse
- I‑H Heavy Industrial zoning
Financial Insights
Estimated NOI and Cap Rate
NOI = area × lease_rate × (100 − vacancy) / 100 × (1 − expense_ratio). Net Operating Income — what the owner takes home each year before mortgage payments and income tax. Effective rent (asking rent minus vacancy losses) minus operating costs (taxes, insurance, maintenance, management).
NOI / Yr
$49,113
Cap rate = NOI / list price × 100. Capitalization rate — annual return on a fully cash purchase, before financing. NOI divided by price. Higher means more income per dollar invested, but usually also more risk or older condition. 5–8% is typical for stabilized commercial property; double digits often signal distressed deals.
Cap Rate
5.14%
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$982,260
$982.3K
Cap Rate 7%
$701,614
$701.6K
Cap Rate 9%
$545,700
$545.7K
Market Conditions
NOI Build-Up for 4,280 SF
Vacancy — income lost from leasable area expected to sit empty during the year, subtracted from gross rent.
EGI (Effective Gross Income) — gross rent minus vacancy losses, the realistic income before paying operating costs.
OpEx (Operating Expenses) — recurring costs to operate the property (property tax, insurance, utilities, maintenance, management); excludes financing and capital improvements.
NOI (Net Operating Income) — income a property generates after operating costs but before financing and taxes.
Gross rent
$77.0K $18.00/SF
− Vacancy
−$11.6K −$2.70/SF
EGI
$65.5K $15.30/SF
− OpEx
−$16.4K −$3.82/SF
NOI
$49.1K $11.48/SF
Area
Chattanooga, TN
Vacancy
15.00%
Lease Rate
$18.00 /SF/Yr
Expense Ratio
25.00%
Simulate Cap Rate and NOI
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$982,260
Cap Rate 7%
$701,614
Cap Rate 9%
$545,700
Alternative Uses
Best Use
Office B
$701.6K
$613.9K – $818.6K
NOI $49,113 @ 7.0% cap · market cap 5.14%
Second Best
Flex RnD
$576.6K
$504.5K – $672.7K
NOI $40,361 @ 7.0% cap · market cap 4.22%
Theoretical Best
Office A
$945.3K
$827.1K – $1.10M
NOI $66,168 @ 7.0% cap · market cap 6.92%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
Yes
Paved road access
Location Intelligence
Trade Area within ½ mile
1,128
Businesses Nearby
Balanced
Demand for This Use
Explore this area
Business Placement
Demographics for 37404, TN
13,106
Population
5,887
Households
2.2
Avg Household Size
34
Median Age
32%
College-Educated
86%
High-School Grad
5.2 sq mi
ZIP Area
2,520
Density / Sq Mi
$53,585
Median Household Income
$35,983
Median Earnings
$999
Median Rent
$235,300
Median Home Value
Market
Vacancy Rate% for Office in South region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Flex space - Freestanding commercial property combining office accommodations with below-grade warehouse space and I-H heavy industrial zoning.
Where is this flex space located?
The property is located at 1085 Bailey Ave Chattanooga, TN.
What is the asking price?
The asking price for this property is $955,500.
What are key features of this property?
This property features: 4,280 +/- SF office space; Additional 4,280 +/- SF below‑grade warehouse; I‑H Heavy Industrial zoning
