Building Details

Year Built 1984

Listing Agency: NAI Sioux Falls

Listed By: Dale Zomer · License #SD 16458 Show Phone

Source: Crexi

Added: Mar 26 Changed: Aug 23 Last Checked: Sep 2 at 6:13PM

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Investment Insights

Based on property information with market context.

This for-sale hospitality property offers 57 keys, positioned as a straightforward motel-style lodging asset. The offering is presented as a single hospitality asset, with unit capacity defined by the 57-key count.

The property is located at 109 Main Street in Hill City, South Dakota. Its Main Street address places it directly within the town’s established commercial corridor.

With 57 keys total, the building is configured to operate as an overnight lodging business, providing an accommodation base sized for a mid-scale hospitality operation.

Key Highlights

• Hospitality property with 57 keys
• Built in 1984
• Located at 109 Main Street in Hill City, South Dakota

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

$112,599

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

4.02%

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%

$2,251,980 $2.3M

Cap Rate 7%

$1,608,557 $1.6M

Cap Rate 9%

$1,251,100 $1.3M

Market Conditions

NOI Build-Up for 19,520 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

$269.4K $13.80/SF

− Vacancy

−$32.3K −$1.66/SF

EGI

$237.1K $12.14/SF

− OpEx

−$124.5K −$6.38/SF

NOI

$112.6K $5.77/SF

Area

Pennington County, SD

Vacancy

12.00%

Lease Rate

$13.80 /SF/Yr

Expense Ratio

52.50%

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%

$2,251,980

Cap Rate 7%

$1,608,557

Cap Rate 9%

$1,251,100

Alternative Uses

Best Use

Hotel Hospitality

$1.61M

$1.41M – $1.88M (±1% cap)

NOI $112,599 @ 7.0% cap · market cap 4.02%

Second Best

—

—

no second resolved use

Theoretical Best

Specialty Retail

$3.54M

$3.10M – $4.13M (±1% cap)

NOI $247,709 @ 7.0% cap · market cap 8.85%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

Property Profile

Current Use

Motels

Suggested Use

Top Pick Building Supply Plumbing Service (Bike/Boat/Book/etc) Store Dental Office Big Box & Wholesale Store Kitchen & Bath Showroom

Score = modeled unmet demand for each use within ~1 mi (higher = bigger opportunity). Zoning and permitted uses should be independently verified with local authorities.

Lease Details

Turnkey business

Opportunity

Location Intelligence

Trade Area within ½ mile

231

Businesses Nearby

Well-served

Demand for This Use

Explore this area Business Placement

Demographics for 57745, SD

2,078

Population

941

Households

2.2

Avg Household Size

53

Median Age

34%

College-Educated

98%

High-School Grad

385.0 sq mi

ZIP Area

5

Density / Sq Mi

$90,089

Median Household Income

$36,154

Median Earnings

$1,016

Median Rent

$323,500

Median Home Value

Questions? Ask Rey

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What type of property is this? Where is this motels located? What is the asking price? Find similar properties What are key features of this property?

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Frequently Asked Questions

What type of property is this?

Motel - For sale hospitality property featuring 57 keys at 109 Main Street in Hill City, South Dakota.

Where is this motel located?

The property is located at 109 Main Street Hill City, SD.

What is the asking price?

The asking price for this property is $2,800,000.

What are key features of this property?

This property features: Hospitality property with 57 keys; Built in 1984; Located at 109 Main Street in Hill City, South Dakota