Mixed-Use Commercial Property For
For Sale
$2,650,000
16795 Monterey Road, Morgan Hill, CA 95037
Mixed-use property with established tenants and value-add potential.
Property Size6,450 SF
Price / SF$410.85
Days on Market422
Property Features for 16795 Monterey Road
General Information
Standard status
Active
Size
6,450 SF
Building Details
Year Built
1990
Listing Agency:
YELLOWSTONE INVESTMENTS
Listed By:
ADAM DAHDOUH
Source:
Corcoran
Added: Jun 19, 2025
Changed: Mar 16
Last Checked: Mar 16 at 9:09AM
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 YELLOWSTONE INVESTMENTS
Investment Insights
Based on property information with market context.
This mixed-use commercial property, built in 1990, offers approximately 6,450 square feet of space on a lot of approximately 25,758 square feet. The property is located on Monterey Rd in Morgan Hill, CA. The building is currently 100% occupied by three established tenants. Each unit includes a private bathroom. Leases include 3% annual rent increases. Crystal Nails Boutique and September Day Spa have options to extend their leases. The property operates with a mix of NNN and gross leases, presenting a value-add opportunity to convert all leases to NNN. The property is serviced by two separate water meters, one for interior use and one for landscaping. The building has undergone over $450,000 in recent capital improvements, and each tenant has also invested significantly in their respective spaces.
Key Highlights
- 100% Occupied by three established tenants.
- ±6,450‑square‑foot mixed‑use commercial property on a ±25,758‑square‑foot lot.
- Located in a dynamic South Bay submarket.
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
$174,224
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
6.57%
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%
$3,484,480
$3.5M
Cap Rate 7%
$2,488,914
$2.5M
Cap Rate 9%
$1,935,822
$1.9M
Market Conditions
NOI Build-Up for 6,450 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
$260.8K $40.44/SF
− Vacancy
−$11.9K −$1.85/SF
EGI
$248.9K $38.59/SF
− OpEx
−$74.7K −$11.58/SF
NOI
$174.2K $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%
$3,484,480
Cap Rate 7%
$2,488,914
Cap Rate 9%
$1,935,822
Alternative Uses
Best Use
Retail
$2.49M
$2.18M – $2.90M
NOI $174,224 @ 7.0% cap · market cap 6.57%
Second Best
Mixed Use
$1.59M
$1.39M – $1.85M
NOI $111,263 @ 7.0% cap · market cap 4.20%
Theoretical Best
Office A
$3.89M
$3.41M – $4.54M
NOI $272,577 @ 7.0% cap · market cap 10.29%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,535
Businesses Nearby
52k
Monthly Visits Nearby
Explore this area
Business Placement
Foot Traffic Nearby
Shops & Services 41%
Apparel 28%
Dining 26%
Beauty & Spa 4%
Dollar Tree
Shops & Services
17,765 visits/mo
0.3 miles
Ross Dress for Less
Apparel
14,577 visits/mo
0.2 miles
Taco Bell
Dining
10,472 visits/mo
0.3 miles
Round Table Pizza
Dining
3,175 visits/mo
0.1 miles
Citibank
Shops & Services
2,263 visits/mo
0.4 miles
Demographics for 95037, CA
53,126
Population
17,185
Households
3.1
Avg Household Size
41
Median Age
44%
College-Educated
90%
High-School Grad
120.1 sq mi
ZIP Area
442
Density / Sq Mi
$158,256
Median Household Income
$71,130
Median Earnings
$2,242
Median Rent
$1,152,400
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?
Mixed-use property - Mixed-use property with established tenants and value-add potential.
Where is this mixed-use property located?
The property is located at 16795 Monterey Road Morgan Hill, CA.
What is the asking price?
The asking price for this property is $2,650,000.
What are key features of this property?
This property features: 100% Occupied by three established tenants.; ±6,450‑square‑foot mixed‑use commercial property on a ±25,758‑square‑foot lot.; Located in a dynamic South Bay submarket.
