PDR-2 Industrial
For Sale
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2136 Palou Ave, San Francisco, CA 94124
Industrial property with production, distribution, and repair zoning designation.
Property Size22,003 SF
Price / SF$440.85
Days on Market50
Property Features for 2136 Palou Ave
General Information
Standard status
Active
Size
22,003 SF
Class
A
Property subtype
Industrial
Zoning
PDR-2 - Production, Distribution and Repair
Building Details
Year Built
1976
Buildings
2
Listing Agency:
HC&M Commercial Properties Inc
Listed By:
R.C. Hildebrand · License #CA 01437090
Source:
Crexi
Added: Jul 13
Changed: Aug 29
Last Checked: Aug 29 at 1:58PM
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 HC&M Commercial Properties Inc
Investment Insights
Based on property information with market context.
This industrial property comprises 22,003 square feet and was built in 1976. The zoning designation is PDR-2, supporting production, distribution, and repair activities under the stated land-use classification.
The property is located at 2136 Palou Avenue in San Francisco, California, within ZIP Code 94124.
The property is located at 2136 Palou Avenue in San Francisco, California, within ZIP Code 94124.
Key Highlights
- 22,003‑square‑foot industrial property
- PDR‑2 zoning: Production, Distribution and Repair
- Built in 1976
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
$374,271
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
3.86%
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%
$7,485,420
$7.5M
Cap Rate 7%
$5,346,729
$5.3M
Cap Rate 9%
$4,158,567
$4.2M
Market Conditions
NOI Build-Up for 22,003 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
$594.1K $27.00/SF
− Vacancy
−$59.4K −$2.70/SF
EGI
$534.7K $24.30/SF
− OpEx
−$160.4K −$7.29/SF
NOI
$374.3K $17.01/SF
Area
San Francisco, CA
Vacancy
10.00%
Lease Rate
$27.00 /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%
$7,485,420
Cap Rate 7%
$5,346,729
Cap Rate 9%
$4,158,567
Alternative Uses
Best Use
Industrial
$5.35M
$4.68M – $6.24M
NOI $374,271 @ 7.0% cap · market cap 3.86%
Second Best
—
—
no second resolved use
Theoretical Best
Specialty Retail
$107.48M
$94.04M – $125.39M
NOI $7,523,293 @ 7.0% cap · market cap 77.56%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,691
Businesses Nearby
Explore this area
Business Placement
Demographics for 94124, CA
39,445
Population
11,780
Households
3.3
Avg Household Size
37
Median Age
27%
College-Educated
75%
High-School Grad
4.8 sq mi
ZIP Area
8,218
Density / Sq Mi
$82,928
Median Household Income
$42,683
Median Earnings
$1,368
Median Rent
$1,043,200
Median Home Value
Market
Vacancy Rate% for Industrial in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Industrial property - Industrial property with production, distribution, and repair zoning designation.
Where is this industrial property located?
The property is located at 2136 Palou Ave San Francisco, CA.
What is the asking price?
The asking price for this property is $9,700,000.
What are key features of this property?
This property features: 22,003‑square‑foot industrial property; PDR‑2 zoning: Production, Distribution and Repair; Built in 1976
