Fully Leased Office
For Sale
$8,500,000
198 Commercial Street SE, Salem, OR 97301
Fully leased Salem office building with 3 leases and significant interior renovation completed between 2021 and 2025.
Property Size41,472 SF
Price / SF$204.96
Days on Market78
Property Features for 198 Commercial Street SE
General Information
Standard status
Active
Size
41,472 SF
Property subtype
Commercial
Occupancy
95%
Building Details
Year Built
1956
Tenancy
Multi
Listing Agency:
Century 21 North Homes Realty
(541) 350-0690
Listed By:
Corey Clark · License #200506069
(541) 350-0690
Source:
Century21northhomes
Added: Jun 10
Changed: Aug 23
Last Checked: Aug 25 at 8:54AM
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 Century 21 North Homes Realty
Investment Insights
Based on property information with market context.
Fully leased office building offering 41,472 square feet across 3 leases. Approximately 95% of the building is leased to Marion County Public Defender and the State of Oregon Public Defense Fund.
The property is located at 198 Commercial St in Salem, directly across the street from the Convention Center. Interior renovations were completed between 2021 and 2025, supporting the building’s current tenant-ready condition.
The property is located at 198 Commercial St in Salem, directly across the street from the Convention Center. Interior renovations were completed between 2021 and 2025, supporting the building’s current tenant-ready condition.
Key Highlights
- Fully leased 41,472 SF Salem office building across the street from the Convention Center
- Building includes 3 leases, with 95% leased to Marion County Public Defender and State of Oregon Public Defense Fund
- Interior renovations completed between 2021 and 2025 with significant interior renovation work
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
$571,069
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
6.72%
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%
$11,421,380
$11.4M
Cap Rate 7%
$8,158,129
$8.2M
Cap Rate 9%
$6,345,211
$6.3M
Market Conditions
NOI Build-Up for 41,472 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
$895.8K $21.60/SF
− Vacancy
−$134.4K −$3.24/SF
EGI
$761.4K $18.36/SF
− OpEx
−$190.4K −$4.59/SF
NOI
$571.1K $13.77/SF
Area
Salem, OR
Vacancy
15.00%
Lease Rate
$21.60 /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%
$11,421,380
Cap Rate 7%
$8,158,129
Cap Rate 9%
$6,345,211
Alternative Uses
Best Use
Office B
$8.16M
$7.14M – $9.52M
NOI $571,069 @ 7.0% cap · market cap 6.72%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$11.01M
$9.63M – $12.85M
NOI $770,782 @ 7.0% cap · market cap 9.07%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
95%
Occupancy
Multi-tenant
Tenancy
Location Intelligence
Trade Area within ½ mile
3,870
Businesses Nearby
Explore this area
Business Placement
Demographics for 97301, OR
56,393
Population
21,419
Households
2.6
Avg Household Size
34
Median Age
18%
College-Educated
81%
High-School Grad
11.3 sq mi
ZIP Area
4,991
Density / Sq Mi
$57,497
Median Household Income
$33,220
Median Earnings
$1,197
Median Rent
$310,800
Median Home Value
Market
Vacancy Rate% for Office in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Office building - Fully leased Salem office building with 3 leases and significant interior renovation completed between 2021 and 2025.
Where is this office building located?
The property is located at 198 Commercial Street SE Salem, OR.
What is the asking price?
The asking price for this property is $8,500,000.
What are key features of this property?
This property features: Fully leased 41,472 SF Salem office building across the street from the Convention Center; Building includes 3 leases, with 95% leased to Marion County Public Defender and State of Oregon Public Defense Fund; Interior renovations completed between 2021 and 2025 with significant interior renovation work
