Building Details

Year Built 1994

Listing Agency: Close-Converse Commercial Prop

Listed By: Chris Close · License #20286846 Show Phone

Source: Homesminn

Added: Sep 11 Last Checked: Sep 13 at 11:49AM

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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 Close-Converse Commercial Prop

Investment Insights

Based on property information with market context.

This 4,446-square-foot restaurant property, built in 1994, is configured for drive-through food service and includes a canopy with a dedicated service window. The interior combines an open customer-facing area with a commercial kitchen, storage rooms, multiple offices, and three restrooms. Furniture, fixtures, and equipment are included in place, supporting an existing food-service setup or a new operator’s concept.

An unfinished 1,560-square-foot basement adds substantial supplemental space for storage or operational support. The property occupies a corner along Hwy 210 at 221 4th St in Ironton, with a layout that accommodates restaurant-focused use and related retail or service operations.

Key Highlights

• Drive‑through canopy and dedicated service window
• 4,446 square feet; built in 1994
• Commercial kitchen with open retail/service area

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

$26,050

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

5.93%

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%

$521,000 $521.0K

Cap Rate 7%

$372,143 $372.1K

Cap Rate 9%

$289,444 $289.4K

Market Conditions

NOI Build-Up for 4,446 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

$38.7K $8.71/SF

− Vacancy

−$1.5K −$0.34/SF

EGI

$37.2K $8.37/SF

− OpEx

−$11.2K −$2.51/SF

NOI

$26.1K $5.86/SF

Area

Crow Wing County, MN

Vacancy

3.90%

Lease Rate

$8.71 /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%

$521,000

Cap Rate 7%

$372,143

Cap Rate 9%

$289,444

Alternative Uses

Best Use

Specialty Retail

$761.4K

$666.2K – $888.3K (±1% cap)

NOI $53,297 @ 7.0% cap · market cap 12.14%

Second Best

Retail

$589.0K

$515.4K – $687.2K (±1% cap)

NOI $41,230 @ 7.0% cap · market cap 9.39%

Theoretical Best

Office A

$943.9K

$825.9K – $1.10M (±1% cap)

NOI $66,071 @ 7.0% cap · market cap 15.05%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

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Current Use

Drive through restaurants

Suggested Use

Top Pick Building Supply Auto Parts Store Law Firm Storage Facility Plumbing Service Grocery & Convenience Store

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

105

Businesses Nearby

Explore this area Business Placement

Demographics for 56455, MN

1,692

Population

820

Households

2.1

Avg Household Size

43

Median Age

21%

College-Educated

91%

High-School Grad

24.5 sq mi

ZIP Area

69

Density / Sq Mi

$65,962

Median Household Income

$36,293

Median Earnings

$994

Median Rent

$200,000

Median Home Value

Market

Vacancy Rate% for Retail in Midwest region

8% 2020

7.3% 2021

6.5% 2022

6% 2023

5.7% 2024

6.3% 2025

Questions? Ask Rey

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

Frequently Asked Questions

What type of property is this?

Drive through restaurant - Adaptable restaurant building with drive-through service, commercial kitchen, offices, storage, and existing furniture, fixtures, and equipment.

Where is this drive through restaurant located?

The property is located at 221 4th St Ironton, MN.

What is the asking price?

The asking price for this property is $439,000.

What are key features of this property?

This property features: Drive‑through canopy and dedicated service window; 4,446 square feet; built in 1994; Commercial kitchen with open retail/service area