Underwood Motel & Extended
For Sale
$1,200,000
26553 Magnolia Road, Underwood, IA 51576
34-unit motel off I-80 in Underwood, Iowa.
Property Size12,770 SF
Lot Size1.37 Acres
Price / SF$93.97
Days on Market135
Property Features for 26553 Magnolia Road
General Information
Standard status
Active
Size
12,770 SF
Lot size
1.37 Acres
Property subtype
Hospitality
Listing Agency:
CBRE | Omaha
(402) 697-5806
Listed By:
Talia Swanson · License #20120409
(402) 697-5806
Source:
Cbre
Added: Mar 25
Changed: Jul 6
Last Checked: Aug 6 at 8:45AM
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 | Omaha
Investment Insights
Based on property information with market context.
The Underwood Motel & Extended Stay is a 34-unit motel located in Underwood, Iowa, adjacent to Interstate 80. Constructed in 1973 and renovated in 1991 and 2024, the two-story, L-shaped building has a total area of 12,770 square feet and is situated on a 1.37-acre lot. The motel features a manager’s office and lobby, as well as a large self-service laundry facility for guests. All rooms include refrigerators, microwaves, complimentary wi-fi, and cable TV. The property includes 9 extended stay suites with separate bedrooms and full kitchens, and 25 rooms with one queen bed and one bathroom. The motel is located next to the Underwood I-80 Truck Stop and is within walking distance of a 500,000-square-foot Jack Links distribution center and the town of Underwood. It is one of only two motels or hotels within 13 miles. The location is convenient to Council Bluffs and the Omaha, Nebraska metropolitan area. Demand generators include I-80 traffic, casinos, golf courses, the Jack Links plant, convention centers, concert venues, and the Henry Doorly Zoo. This property presents an excellent opportunity for an owner/operator.
Key Highlights
- Prime location adjacent to I‑80 (Exit 17) with high visibility and accessibility.
- Only one of two motels/hotels within a 13‑mile radius, minimizing competition.
- Recent renovations in 2024 and extensive capital improvements enhance property value and appeal.
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
$77,338
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
6.44%
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%
$1,546,760
$1.5M
Cap Rate 7%
$1,104,829
$1.1M
Cap Rate 9%
$859,311
$859.3K
Market Conditions
NOI Build-Up for 12,770 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
$191.6K $15.00/SF
− Vacancy
−$28.7K −$2.25/SF
EGI
$162.8K $12.75/SF
− OpEx
−$85.5K −$6.69/SF
NOI
$77.3K $6.06/SF
Area
Pottawattamie County, IA
Vacancy
15.00%
Lease Rate
$15.00 /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%
$1,546,760
Cap Rate 7%
$1,104,829
Cap Rate 9%
$859,311
Alternative Uses
Best Use
Hotel Hospitality
$1.10M
$966.7K – $1.29M
NOI $77,338 @ 7.0% cap · market cap 6.44%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$2.44M
$2.13M – $2.85M
NOI $170,717 @ 7.0% cap · market cap 14.23%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
30
Businesses Nearby
Well-served
Demand for This Use
Explore this area
Business Placement
Demographics for 51576, IA
2,058
Population
751
Households
2.7
Avg Household Size
40
Median Age
32%
College-Educated
97%
High-School Grad
46.3 sq mi
ZIP Area
44
Density / Sq Mi
$107,679
Median Household Income
$47,314
Median Earnings
$819
Median Rent
$291,500
Median Home Value
Questions? Ask Rey
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Similar Off Market Nearby
- Underwood Motel I80 — 26553 Magnolia Rd, Underwood, IA 51576
Frequently Asked Questions
What type of property is this?
Motel - 34-unit motel off I-80 in Underwood, Iowa.
Where is this motel located?
The property is located at 26553 Magnolia Road Underwood, IA.
What is the asking price?
The asking price for this property is $1,200,000.
What are key features of this property?
This property features: Prime location adjacent to I‑80 (Exit 17) with high visibility and accessibility.; Only one of two motels/hotels within a 13‑mile radius, minimizing competition.; Recent renovations in 2024 and extensive capital improvements enhance property value and appeal.
