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    1604 Chestnut St, Philadelphia, PA 19103

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    New 20-year NNN lease with McDonald's in place.

    Type:Restaurant
    Property size:
    4,566 SF
    Added:
    Apr 3, 2026
    Days on Market:
    65
    Last Refresh:
    Apr 3 at 5:40 am

    Property Features for 1604 Chestnut St

    General Information

    Standard status
    Active
    Size
    4,566 SF
    Property subtype
    Restaurant

    We can help!

    Listing Contact
    Timothy B. Stephenson Jr.

    Listing agent Timothy B. Stephenson Jr. License #License(s) PA: RMR006104

    Listing office

    Listing date Apr 3, 2026

    Source Marcusmillichap

    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 Timothy B. Stephenson Jr.

    HighLights

    • New 20‑year NNN lease with McDonald’s USA, LLC commencing in February 2026, providing long‑term, stable income.
    • Rare depreciation benefits due to fee‑simple ownership, offering meaningful tax shelter and enhancing after‑tax yield.
    • Exceptional pedestrian traffic: Located at the intersection of 16th and Chestnut, which recorded the highest pedestrian counts in Center City (28,860 daily).
    • Prime location with 17 feet of frontage, surrounded by dense retail, office, residential, and tourist activity near major destinations.
    • Rental increases every five years, including a rare 15% increase in year 6, providing a strong hedge against inflation.
    • At‑market rental rate ensures income stream is supportable and easily replaceable.

    Overview

    A commercial property located in Philadelphia, PA, is available for sale. McDonald’s USA, LLC has executed a new 20-year NNN lease, scheduled to commence in February 2026. The lease features 10% rental increases every five years throughout the base term and option periods, except for a 15% increase in year 6. McDonald’s return to this corridor comes nearly five years after a fire led to the demolition of their longtime Walnut Street location. The property has 17 feet of frontage and is near the southwest corner of 16th Street. It is surrounded by retail, office, residential, and tourist activity. This location benefits from foot traffic and proximity to Rittenhouse Square, the Central Business District, City Hall, and the Theater District. The intersection of 16th and Chestnut recorded the highest pedestrian counts in all of Center City, with an average daily pedestrian volume of 28,860, according to studies conducted in 2021 and 2022. The property is visible to vehicular and foot traffic and is supported by transit connectivity, with multiple SEPTA rail lines and bus routes. The property provides depreciation benefits, and McDonald’s occupies the property at an at-market rental rate. The property size is 4566 square feet.
    Location Intelligence

    Current Use by Public Records

    Drive through restaurants

    Suggested Use

    Restaurant Real Estate Agency Spa & Massage Center Hair Salon Dental Office Nail Salon Law Firm Food Market Grocery & Convenience Store Daycare Center

    Zoning and permitted uses should be independently verified with local authorities.

    Location Insight

    • Map
    • Local Demand
    City
    Philadelphia
    County
    Delaware
    State
    Pennsylvania
    Longitude
    -75.167616
    Latitude
    39.951033

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    FAQs

    What type of property is this?
    Drive through restaurant - New 20-year NNN lease with McDonald's in place.
    Where is this drive through restaurant located?
    The property is located at 1604 Chestnut St Philadelphia, PA.
    What are key features of this property?
    This property features: New 20‑year NNN lease with McDonald’s USA, LLC commencing in February 2026, providing long‑term, stable income.; Rare depreciation benefits due to fee‑simple ownership, offering meaningful tax shelter and enhancing after‑tax yield.; Exceptional pedestrian traffic: Located at the intersection of 16th and Chestnut, which recorded the highest pedestrian counts in Center City (28,860 daily).
    (215) 531-7000
    We can help!
    Listing Contact
    Timothy B. Stephenson Jr.
    Real Estate License ID: License(s) PA: RMR006104
    Learn More
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    Realmo Value Estimations

    Realmo estimates a property’s market value using a proprietary methodology that incorporates public data and user-submitted information. This cumulative value is generated by integrating a variety of conventional and innovative methods. 

    Disclaimer

    These figures are not official appraisals and should not be used as a substitute for a valuation performed by a licensed appraiser.
    Actual market value may differ due to factors not captured in the data. Estimates are offered for informational purposes only, and users should conduct independent research before making financial or investment decisions.
    By using this feature, you acknowledge that Realmo is not responsible for actions taken based on these estimates.

    AI approach

    Realmo AI Method estimates property value using machine learning models trained on millions of comparable listings, transactions, and market signals. It analyzes property features, location intelligence data, and current market dynamics to predict the most probable market value in real time.

    Realmo CapRate Calculation

    Realmo calculates the Capitalization Rate (Cap Rate) to help estimate a property's potential return on investment. The Cap Rate is a fundamental metric in commercial real estate that measures the relationship between a property's net operating income and its market value.

    How We Calculate Cap Rate

    Cap Rate Formula:
    Cap Rate (%) = (Net Operating Income / Property Value) × 100

    Net Operating Income (NOI) Formula:
    NOI = Area × Lease Rate × (1 - Vacancy Rate) × (1 - Operating Expense Ratio)

    Components

    Net Operating Income (NOI) represents the annual income a property generates after operating expenses:

    • Area: Building square footage from property records
    • Lease Rate: Annual $/sqft based on market data for the property type and geographic location
    • Vacancy Rate: Percentage of unoccupied space based on market data for the property type and location
    • Operating Expense Ratio: Operating costs as a percentage of income, varies by property type

    Property Value is derived from:

    • Recent sale price (if available)
    • Statistical models using comparable sales
    • AI-powered valuation estimates

    Example Calculation

    For a 100,000 sqft Office Building:

    • Lease Rate: $25.00/sqft/year (market data for Office in this area)
    • Vacancy Rate: 8% (market data for Office in this area)
    • Operating Expense Ratio: 35% (typical for Office properties)
    • Property Value: $15,000,000

    Step 1: Calculate NOI

    NOI = 100,000 × $25.00 × (1 - 0.08) × (1 - 0.35)
    NOI = 100,000 × $25.00 × 0.92 × 0.65
    NOI = $1,495,000/year

    Step 2: Calculate Cap Rate

    Cap Rate = ($1,495,000 / $15,000,000) × 100
    Cap Rate = 9.97%

    Property Type Considerations

    Net Operating Income calculations vary by property type due to different operating expense ratios:

    • Office: Higher expenses (30-40%) for HVAC, utilities, maintenance
    • Retail: Moderate expenses (25-35%) for common area maintenance
    • Industrial/Warehouse: Lower expenses (15-25%) for minimal tenant services
    • Multifamily: Moderate expenses (35-45%) including property management
    • Self-Storage: Lower expenses (25-35%) due to minimal maintenance

    Market lease rates and vacancy rates are specific to each property type and geographic location, reflecting local market conditions.

    Disclaimer

    These calculations are estimates for informational purposes only and should not be used as a substitute for professional financial analysis or appraisal.

    • Cap Rate calculations depend on market data that may change over time
    • Actual operating expenses, lease rates, and vacancy rates may differ from market averages
    • Individual property conditions, lease terms, and tenant quality significantly impact actual NOI
    • Property value estimates are approximations and not official appraisals
    • Cap rates vary widely by market, property condition, and investment risk profile

    Professional Guidance Recommended: Before making any investment or financial decisions, consult with licensed appraisers, commercial real estate brokers, and financial advisors who can evaluate your specific property and circumstances.
    By using this feature, you acknowledge that Realmo is not responsible for investment decisions or actions taken based on these estimates.

    Cap approach

    Capitalization Method calculates value based on estimated net operating income (NOI) and applying a market-based capitalization rate (cap rate), we estimate what a typical investor might be willing to pay for it.

    Comparable approach

    Comparable estimate is based on recent sales of similar nearby properties, adjusted for factors like size, condition, and location.

    Relative

    Relative property class coefficient uses factors that account for typical price differences between various asset types (e.g., retail vs. industrial) to provide a more accurate market-aligned estimate.

    Geo

    Comparable Sales Method, enhanced by Geo coefficients — location-based adjustment factors that reflect differences in price levels across neighborhoods, cities, or regions ensuring a more accurate, market-sensitive valuation.

    Stat Estimate

    This method estimates value based on actual market adjusted recent (~5 years) sales of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all similar sales ($/sqft) are above this value
    • Range-to: 75% of all similar sales ($/sqft) are below this value
    AI Estimate

    This method estimates value based on AI market estimation of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all estimations ($/sqft) are above this value
    • Range-to: 75% of all estimations ($/sqft) are below this value
    Alternative use

    Estimate considers the property’s potential value if used for a different purpose-based on zoning, demand, and market feasibility.

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