Cannabis-Permitted Industrial
For Sale
$2,500,000
5360 South Watt Avenue, Sacramento, CA 95826
Multi-suite industrial property with a Sacramento-approved cannabis distribution and delivery entitlement.
Property Size9,600 SF
Days on Market9
Property Features for 5360 South Watt Avenue
General Information
Standard status
Active
Size
9,600 SF
Class
C
Property subtype
Industrial
Zoning
M-1S-R
Building Details
Building Size
9,600 SF
Year Built
1994
Listing Agency:
RE/MAX Gold Commercial
Listed By:
Greg Diodati, CCIM · License ##00831160
(916) 218-7490
Source:
Remaxcommercial
Added: Aug 25
Changed: Aug 30
Last Checked: Sep 1 at 2:30PM
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 RE/MAX Gold Commercial
Investment Insights
Based on property information with market context.
This industrial property includes 9,600 square feet gross and 8,748 rentable square feet arranged across eight fully leased suites. Built in 1994 on a 40,119-square-foot lot, the building offers 20-foot clear height, four drive-in loading doors, 400A/3-phase power, and a wet sprinkler system. A City of Sacramento-approved Conditional Use Permit supports cannabis distribution and delivery. Tenant improvements include controlled-access suite demising, security infrastructure, and a shared common area designed for social equity tenant use.
All leases are structured as triple net with 3% fixed annual escalations and personal guaranties from all eight tenants. Lease expirations are staggered from 2026 through 2029. The property is located in Sacramento’s Power Inn Submarket, approximately one mile from Highway 50, with access to I-5 and Highway 99 and the region’s logistics corridors.
All leases are structured as triple net with 3% fixed annual escalations and personal guaranties from all eight tenants. Lease expirations are staggered from 2026 through 2029. The property is located in Sacramento’s Power Inn Submarket, approximately one mile from Highway 50, with access to I-5 and Highway 99 and the region’s logistics corridors.
Key Highlights
- City of Sacramento‑approved Conditional Use Permit for cannabis distribution and delivery
- 9,600 SF gross building with 8,748 rentable square feet across eight fully leased suites
- 40,119 SF lot (0.92 acres), built in 1994
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
$73,714
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
2.95%
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%
$1,474,280
$1.5M
Cap Rate 7%
$1,053,057
$1.1M
Cap Rate 9%
$819,044
$819.0K
Market Conditions
NOI Build-Up for 9,600 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
$92.2K $9.60/SF
− Vacancy
−$5.4K −$0.57/SF
EGI
$86.7K $9.03/SF
− OpEx
−$13.0K −$1.36/SF
NOI
$73.7K $7.68/SF
Area
Sacramento, CA
Vacancy
5.90%
Lease Rate
$9.60 /SF/Yr
Expense Ratio
15.00%
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%
$1,474,280
Cap Rate 7%
$1,053,057
Cap Rate 9%
$819,044
Alternative Uses
Best Use
Warehouse
$1.05M
$921.4K – $1.23M
NOI $73,714 @ 7.0% cap · market cap 2.95%
Second Best
—
—
no second resolved use
Theoretical Best
Specialty Retail
$2.58M
$2.26M – $3.01M
NOI $180,576 @ 7.0% cap · market cap 7.22%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
233
Businesses Nearby
Explore this area
Business Placement
Demographics for 95826, CA
39,902
Population
16,712
Households
2.4
Avg Household Size
35
Median Age
36%
College-Educated
93%
High-School Grad
10.5 sq mi
ZIP Area
3,800
Density / Sq Mi
$77,689
Median Household Income
$44,486
Median Earnings
$1,691
Median Rent
$441,300
Median Home Value
Market
Vacancy Rate% for Industrial in Sacramento, CA
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Cannabis property - Multi-suite industrial property with a Sacramento-approved cannabis distribution and delivery entitlement.
Where is this cannabis property located?
The property is located at 5360 South Watt Avenue Sacramento, CA.
What is the asking price?
The asking price for this property is $2,500,000.
What are key features of this property?
This property features: City of Sacramento‑approved Conditional Use Permit for cannabis distribution and delivery; 9,600 SF gross building with 8,748 rentable square feet across eight fully leased suites; 40,119 SF lot (0.92 acres), built in 1994
