Renovated Office
For Sale
$8,825,000
198 COMMERCIAL St Unit 198, Salem, OR 97301
CBD office property with central air and substantial interior improvements completed between 2021 and 2025.
Property Size41,472 SF
Price / SF$212.79
Days on Market80
Property Features for 198 COMMERCIAL St Unit 198
General Information
Standard status
Active
Size
41,472 SF
Property subtype
Office
Taxes and HOA fees
Annual Taxes
$87,745
Amenities
Central Air
CBD
Building Details
Year Built
1956
Listing Agency:
Mackintosh, Inc.
(240) 529-0177
Listed By:
C. Melony Bush
(240) 529-0177
Source:
Xome
Added: Jun 13
Changed: Aug 29
Last Checked: Aug 30 at 1:16PM
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 Mackintosh, Inc.
Investment Insights
Based on property information with market context.
This 41,472-square-foot office building was constructed in 1956 and received significant interior renovation work between 2021 and 2025. Central air is included, and the property is organized under three leases involving the Marion County Public Defender and the State of Oregon Public Defense Fund.
The building is located at 198 Commercial St in Salem, directly across from the Convention Center. Its CBD designation and established office configuration provide a defined commercial setting for professional occupancy.
The building is located at 198 Commercial St in Salem, directly across from the Convention Center. Its CBD designation and established office configuration provide a defined commercial setting for professional occupancy.
Key Highlights
- 41,472‑square‑foot office building
- Significant interior renovation completed between 2021 and 2025
- Three leases in place
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
6.47%
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 6.47%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$11.01M
$9.63M – $12.85M
NOI $770,782 @ 7.0% cap · market cap 8.73%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
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 - CBD office property with central air and substantial interior improvements completed between 2021 and 2025.
Where is this office building located?
The property is located at 198 COMMERCIAL St Unit 198 Salem, OR.
What is the asking price?
The asking price for this property is $8,825,000.
What are key features of this property?
This property features: 41,472‑square‑foot office building; Significant interior renovation completed between 2021 and 2025; Three leases in place
