Building Details

Buildings 1

Listing Agency: RE/MAX Realty Source j***@charter.net Show Phone

Listed By: Jodie Parrish · License #262502 Show Phone

Source: Exprealty

Added: Jun 9 Changed: Aug 3 Last Checked: Aug 3 at 5:21AM

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Investment Insights

Based on property information with market context.

This 4,000-hsf historic building is configured for restaurant operations and includes the furnishings needed for that use. The property also has an upper level described as suitable for apartments or short-term rentals, creating additional use flexibility within the existing structure.

Located at 1704 Highway 138 in Mercer, Tennessee, the building combines an established restaurant format with a distinct second-floor component. The sale includes the restaurant furnishings, allowing the next owner to evaluate the existing setup for continued restaurant use or a revised operating plan.

Key Highlights

• 4,000‑hsf historic restaurant building
• Restaurant furnishings included with the sale
• Upper level described for apartment or short‑term rental use

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

$20,668

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

6.08%

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%

$413,360 $413.4K

Cap Rate 7%

$295,257 $295.3K

Cap Rate 9%

$229,644 $229.6K

Market Conditions

NOI Build-Up for 4,000 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

$40.3K $10.08/SF

− Vacancy

−$2.7K −$0.69/SF

EGI

$37.6K $9.39/SF

− OpEx

−$16.9K −$4.23/SF

NOI

$20.7K $5.17/SF

Area

Madison County, TN

Vacancy

6.80%

Lease Rate

$10.08 /SF/Yr

Expense Ratio

45.00%

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%

$413,360

Cap Rate 7%

$295,257

Cap Rate 9%

$229,644

Alternative Uses

Best Use

Specialty Retail

$750.6K

$656.8K – $875.7K (±1% cap)

NOI $52,542 @ 7.0% cap · market cap 15.45%

Second Best

Mixed Use

$595.3K

$520.9K – $694.5K (±1% cap)

NOI $41,670 @ 7.0% cap · market cap 12.26%

Theoretical Best

Office A

$823.7K

$720.7K – $961.0K (±1% cap)

NOI $57,658 @ 7.0% cap · market cap 16.96%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

Current Use

Conventional restaurants

Suggested Use

Top Pick Grocery & Convenience Store Law Firm Restaurant

Score = modeled unmet demand for each use within ~1 mi (higher = bigger opportunity). Zoning and permitted uses should be independently verified with local authorities.

Location Intelligence

Trade Area within ½ mile

11

Businesses Nearby

Well-served

Demand for This Use

Explore this area Business Placement

Demographics for 38392, TN

739

Population

286

Households

2.6

Avg Household Size

46

Median Age

13%

College-Educated

86%

High-School Grad

36.0 sq mi

ZIP Area

21

Density / Sq Mi

$52,188

Median Household Income

$26,908

Median Earnings

$43,400

Median Home Value

Market

Vacancy Rate% for Multifamily in South region

8.5% 2022

10.2% 2023

11.4% 2024

11.3% 2025

Questions? Ask Rey

Realmo’s AI knows this listing — price, zoning, demand, history. Ask anything.

What type of property is this? Where is this conventional restaurants located? What is the asking price? Find similar properties ... What are key features of this property?

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Historic Restaurant Building

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Frequently Asked Questions

What type of property is this?

Conventional restaurant - Restaurant furnishings are included, with an upper level identified for apartment or short-term rental use.

Where is this conventional restaurant located?

The property is located at 1704 Highway 138 Mercer, TN.

What is the asking price?

The asking price for this property is $340,000.

What are key features of this property?

This property features: 4,000‑hsf historic restaurant building; Restaurant furnishings included with the sale; Upper level described for apartment or short‑term rental use