Freestanding Commercial Building For
For Sale
$3,900,000
7950 Arroyo Circle, Gilroy, CA 95020
7,550 SF building on 2.27 acre parcel for sale.
Property Size7,550 SF
Lot Size2.27 Acres
Price / SF$516.56
Days on Market141
Property Features for 7950 Arroyo Circle
General Information
Standard status
Active
Size
7,550 SF
Lot size
2.27 Acres
Property subtype
Retail
Listing Agency:
CBRE | San Jose
(408) 453-7468
Listed By:
Marie Anderson · License #00919144
(408) 453-7468
Source:
Cbre
Added: Mar 25
Changed: Aug 11
Last Checked: Aug 11 at 12:00PM
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 CBRE | San Jose
Investment Insights
Based on property information with market context.
This is a 7,550 square foot freestanding commercial building situated on a 2.27 acre parcel. It is suitable for retail, commercial, office, showroom, or restaurant use. The property can be sold vacant or as a leased investment with a new ten-year lease with Los Cuates Mexican Restaurant. Furniture, fixtures, and equipment are included. The property benefits from freeway pylon signage and freeway visibility on Highway 101. It is located adjacent to the Gilroy Outlet Center and Johnson RV and features exceptional parking.
Key Highlights
- High visibility freeway pylon signage on Hwy 101
- Large ±2.27 acre parcel with exceptional parking
- 7,550 SF freestanding building** suitable for retail, commercial, office, showroom, or restaurant
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
$203,937
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
5.23%
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%
$4,078,740
$4.1M
Cap Rate 7%
$2,913,386
$2.9M
Cap Rate 9%
$2,265,967
$2.3M
Market Conditions
NOI Build-Up for 7,550 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
$305.3K $40.44/SF
− Vacancy
−$14.0K −$1.85/SF
EGI
$291.3K $38.59/SF
− OpEx
−$87.4K −$11.58/SF
NOI
$203.9K $27.01/SF
Area
Santa Clara County, CA
Vacancy
4.58%
Lease Rate
$40.44 /SF/Yr
Expense Ratio
30.00%
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%
$4,078,740
Cap Rate 7%
$2,913,386
Cap Rate 9%
$2,265,967
Alternative Uses
Best Use
Retail
$2.91M
$2.55M – $3.40M
NOI $203,937 @ 7.0% cap · market cap 5.23%
Second Best
Specialty Retail
$2.01M
$1.76M – $2.34M
NOI $140,521 @ 7.0% cap · market cap 3.60%
Theoretical Best
Office A
$4.56M
$3.99M – $5.32M
NOI $319,064 @ 7.0% cap · market cap 8.18%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
602
Businesses Nearby
521k
Monthly Visits Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Foot Traffic Nearby
Apparel 63%
Shops & Services 15%
Dining 8%
Home Improvements & Furnishings 8%
Nike Factory Store
Apparel
65,403 visits/mo
0.1 miles
The Home Depot
Home Improvements & Furnishings
34,334 visits/mo
0.5 miles
lululemon athletica
Apparel
22,885 visits/mo
0.2 miles
The North Face
Apparel
19,809 visits/mo
0.2 miles
Bath & Body Works
Beauty & Spa
15,855 visits/mo
0.1 miles
Demographics for 95020, CA
68,090
Population
20,679
Households
3.3
Avg Household Size
37
Median Age
28%
College-Educated
83%
High-School Grad
151.8 sq mi
ZIP Area
449
Density / Sq Mi
$134,242
Median Household Income
$50,421
Median Earnings
$2,256
Median Rent
$1,005,600
Median Home Value
Market
Vacancy Rate% for Retail in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Conventional restaurant - 7,550 SF building on 2.27 acre parcel for sale.
Where is this conventional restaurant located?
The property is located at 7950 Arroyo Circle Gilroy, CA.
What is the asking price?
The asking price for this property is $3,900,000.
What are key features of this property?
This property features: High visibility freeway pylon signage on Hwy 101; Large ±2.27 acre parcel with exceptional parking; 7,550 SF freestanding building** suitable for retail, commercial, office, showroom, or restaurant
