Listing Agency: Southern Land Company TN, llc

Listed By: Stephen Shane Martin

Source: Crexi

Added: Jul 29, 2024 Changed: Aug 14 Last Checked: Aug 21 at 3:49PM

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Investment Insights

Based on property information with market context.

This commercial property presents an investment opportunity with highway frontage and a railroad rail spur. The 4200-square-foot enclosed building includes an office and two bay doors. Additionally, there is a 4000-square-foot open side shop featuring a concrete floor. Previously used as a sawmill, the property is versatile and may be suitable for various businesses, including an outdoor storage facility. Located near the Arkansas/Missouri state line, the property offers access to Bentonville, Arkansas. Equipment is not included in the sale.

Key Highlights

• Excellent highway frontage for high visibility and accessibility.
• Valuable railroad rail spur on the backside of the property for efficient transportation.
• 4200 sq ft enclosed building with office space and 2 bay doors.

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

$42,562

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

5.87%

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%

$851,240 $851.2K

Cap Rate 7%

$608,029 $608.0K

Cap Rate 9%

$472,911 $472.9K

Market Conditions

NOI Build-Up for 4,200 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

$70.6K $16.80/SF

− Vacancy

−$5.1K −$1.21/SF

EGI

$65.5K $15.59/SF

− OpEx

−$22.9K −$5.46/SF

NOI

$42.6K $10.13/SF

Area

Benton County, AR

Vacancy

7.20%

Lease Rate

$16.80 /SF/Yr

Expense Ratio

35.00%

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%

$851,240

Cap Rate 7%

$608,029

Cap Rate 9%

$472,911

Alternative Uses

Best Use

Flex RnD

$608.0K

$532.0K – $709.4K (±1% cap)

NOI $42,562 @ 7.0% cap · market cap 5.87%

Second Best

Industrial

$225.8K

$197.6K – $263.4K (±1% cap)

NOI $15,805 @ 7.0% cap · market cap 2.18%

Theoretical Best

Office A

$1.15M

$1.01M – $1.35M (±1% cap)

NOI $80,793 @ 7.0% cap · market cap 11.14%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

Current Use

Flex space

Location Intelligence

Trade Area within ½ mile

13

Businesses Nearby

Well-served

Demand for This Use

Explore this area Business Placement

Demographics for 72732, AR

4,990

Population

2,834

Households

1.8

Avg Household Size

46

Median Age

24%

College-Educated

89%

High-School Grad

86.9 sq mi

ZIP Area

57

Density / Sq Mi

$68,548

Median Household Income

$38,788

Median Earnings

$955

Median Rent

$236,600

Median Home Value

Market

Vacancy Rate% for Industrial in South region

6% 2019

6.5% 2020

4% 2021

3.5% 2022

6% 2023

7.6% 2024

7.9% 2025

Questions? Ask Rey

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Frequently Asked Questions

What type of property is this?

Flex space - Versatile commercial property with highway frontage and railroad access.

Where is this flex space located?

The property is located at 17427 AR 37 HWY Gateway, AR.

What is the asking price?

The asking price for this property is $725,000.

What are key features of this property?

This property features: Excellent highway frontage for high visibility and accessibility.; Valuable railroad rail spur on the backside of the property for efficient transportation.; 4200 sq ft enclosed building with office space and **2 bay doors**.