Renovated Office
New
For Sale
$24,550,000
21 1st St SW, Rochester, MN 55902
Multi-tenant office property with substantial 2020 renovations, established tenancy, and direct connections to downtown pedestrian infrastructure.
Property Size101,389 SF
Price / SF$242.14
Days on Market3
Property Features for 21 1st St SW
General Information
Standard status
Active
Size
101,389 SF
Property subtype
Commercial
Occupancy
89%
Net Operating Income
$1,851,926
Additional Details
Public Transit
Yes
Building Details
Year Renovated
2020
Tenancy
Multi
Listing Agency:
Matthews Real Estate Investments Services | New York
Listed By:
Michael Moreno · License #01982943 (CA)
(949) 432-4511
Source:
Matthews
Added: Sep 22
Changed: Sep 23
Last Checked: Sep 24 at 6:32AM
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 Matthews Real Estate Investments Services | New York
Investment Insights
Based on property information with market context.
This 101,389 SF office property is 89% leased, with primarily NNN lease structures and contractual annual rent escalations. The building underwent a comprehensive renovation in 2020, followed by additional improvements supporting long-term commitments from major occupants. Mayo Clinic leases roughly 47% of the rentable area, while Wells Fargo occupies approximately 22%; together, those tenants represent approximately 69% of the property’s rentable square footage.
Located at 21 1st St SW in downtown Rochester, the property is one block from the 754-bed Mayo Clinic Methodist Hospital and overlooks Peace Plaza. Direct connections to Rochester’s pedestrian skyway and subway system link the building with Mayo Clinic, hotels, parking facilities, restaurants, and other downtown amenities. Approximately 11% vacancy remains within the property.
Located at 21 1st St SW in downtown Rochester, the property is one block from the 754-bed Mayo Clinic Methodist Hospital and overlooks Peace Plaza. Direct connections to Rochester’s pedestrian skyway and subway system link the building with Mayo Clinic, hotels, parking facilities, restaurants, and other downtown amenities. Approximately 11% vacancy remains within the property.
Key Highlights
- 101,389 SF office property with 89% leased occupancy
- Primarily NNN lease structures with contractual annual rent escalations
- Mayo Clinic occupies roughly 47% of rentable square footage
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
$1,868,346
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
7.61%
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%
$37,366,920
$37.4M
Cap Rate 7%
$26,690,657
$26.7M
Cap Rate 9%
$20,759,400
$20.8M
Market Conditions
NOI Build-Up for 101,389 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
$2.74M $27.00/SF
− Vacancy
−$246.4K −$2.43/SF
EGI
$2.49M $24.57/SF
− OpEx
−$622.8K −$6.14/SF
NOI
$1.87M $18.43/SF
Area
Rochester, MN
Vacancy
9.00%
Lease Rate
$27.00 /SF/Yr
Expense Ratio
25.00%
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%
$37,366,920
Cap Rate 7%
$26,690,657
Cap Rate 9%
$20,759,400
Alternative Uses
Best Use
Office B
$26.69M
$23.35M – $31.14M
NOI $1,868,346 @ 7.0% cap · market cap 7.61%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$39.05M
$34.17M – $45.56M
NOI $2,733,512 @ 7.0% cap · market cap 11.13%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
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Current Use
Lease Details
Multi-tenant
Tenancy
Location Intelligence
Trade Area within ½ mile
7,290
Businesses Nearby
Explore this area
Business Placement
Demographics for 55902, MN
25,878
Population
11,954
Households
2.2
Avg Household Size
40
Median Age
66%
College-Educated
98%
High-School Grad
41.1 sq mi
ZIP Area
630
Density / Sq Mi
$111,879
Median Household Income
$68,869
Median Earnings
$1,580
Median Rent
$430,100
Median Home Value
Check the figures for this property
Cap Rate, Value Estimation, Potential NOI and more
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Market
Vacancy Rate% for Office in Midwest region
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Frequently Asked Questions
What type of property is this?
Office building - Multi-tenant office property with substantial 2020 renovations, established tenancy, and direct connections to downtown pedestrian infrastructure.
Where is this office building located?
The property is located at 21 1st St SW Rochester, MN.
What is the asking price?
The asking price for this property is $24,550,000.
What are key features of this property?
This property features: 101,389 SF office property with 89% leased occupancy; Primarily NNN lease structures with contractual annual rent escalations; Mayo Clinic occupies roughly 47% of rentable square footage
