Downtown Commercial Building with
For Sale
$1,400,000
Pending
223 E Palace Avenue, Santa Fe, NM 87501
CommercialSale, Santa Fe, NM
Property Size3,072 SF
Lot Size0.14 Acres
Days on Market57
Property Features for 223 E Palace Avenue
General Information
Property type
Commercial Sale
Property subtype
Retail
Zoning
BCD
Directions
Located on the NE corner of E. Palace Ave. and Cienega St. Parking is off Cienega St.
Standard status
Pending
APN
010739350
Size
3,072 SF
Lot size
0.14 Acres
Taxes and HOA fees
Tax Description
LOT 3 DBA THE HEDRICK COMPANY
Legal Description
LOT 3 DBA THE HEDRICK COMPANY
Utilities
Sewer type
Public Sewer
Water source
Public
Amenities
porch
Building Details
Year built
1910
Flooring type
Tile, Wood, Carpet
Building materials
Brick, Frame
Roof type
Tar/Gravel, Flat
Listing Agency:
Barker Realty, LLC
(505) 982-9836
Listed By:
Stefan Lark · License #48623
(505) 501-6100
Added: Jul 2
Changed: Aug 19
Last Checked: Aug 27 at 9:06PM
MLS# 202602897
Copyright © 2026 Santa Fe Association of REALTORS®, Inc. All rights reserved. All information provided by the listing agent/broker is deemed reliable but is not guaranteed and should be independently verified.
Investment Insights
Based on property information with market context.
This downtown commercial building at 223 E Palace Avenue includes three separate units: one retail space, one office space, and one residence. The property provides a total of 7 parking spaces and features an original home built in 1910 with an addition added in the mid-1970s. Recent improvements include new 200-amp electric service, new HVAC in Unit 1, and heat/cool split systems in Unit B.
The building is described as approximately 1 1/2 blocks to the Plaza, with excellent street frontage and a porch facing Palace Ave.
Zoned BCD, the current layout supports multi-use occupancy across the retail, office, and residential components.
The building is described as approximately 1 1/2 blocks to the Plaza, with excellent street frontage and a porch facing Palace Ave.
Zoned BCD, the current layout supports multi-use occupancy across the retail, office, and residential components.
Key Highlights
- Downtown commercial building with 7 parking spaces and strong Palace Ave frontage
- Approximately 3,072 SF total with 3 separate units: retail, office, and residence
- Built in 1910 with an addition in the mid‑1970s; brick and frame construction
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
$42,301
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
3.02%
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%
$846,020
$846.0K
Cap Rate 7%
$604,300
$604.3K
Cap Rate 9%
$470,011
$470.0K
Market Conditions
NOI Build-Up for 3,072 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
$66.4K $21.60/SF
− Vacancy
−$10.0K −$3.24/SF
EGI
$56.4K $18.36/SF
− OpEx
−$14.1K −$4.59/SF
NOI
$42.3K $13.77/SF
Area
Santa Fe County, NM
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%
$846,020
Cap Rate 7%
$604,300
Cap Rate 9%
$470,011
Alternative Uses
Best Use
Office B
$604.3K
$528.8K – $705.0K
NOI $42,301 @ 7.0% cap · market cap 3.02%
Second Best
Retail
$556.6K
$487.0K – $649.3K
NOI $38,959 @ 7.0% cap · market cap 2.78%
Theoretical Best
Office A
$834.2K
$729.9K – $973.2K
NOI $58,393 @ 7.0% cap · market cap 4.17%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
1
Office units
1
Residential units
Multi-tenant
Tenancy
Yes
Paved road access
Yes
Utilities to site
Location Intelligence
Trade Area within ½ mile
4,050
Businesses Nearby
Explore this area
Business Placement
Demographics for 87501, NM
15,116
Population
10,480
Households
1.4
Avg Household Size
58
Median Age
61%
College-Educated
97%
High-School Grad
50.6 sq mi
ZIP Area
299
Density / Sq Mi
$81,229
Median Household Income
$52,851
Median Earnings
$1,516
Median Rent
$649,100
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?
Retail space - Downtown building with three units, including retail and office, plus 7 parking spaces and recent electrical and HVAC updates.
Where is this retail space located?
The property is located at 223 E Palace Avenue Santa Fe, NM.
What is the asking price?
The asking price for this property is $1,400,000.
What are key features of this property?
This property features: Downtown commercial building with 7 parking spaces and strong Palace Ave frontage; Approximately 3,072 SF total with 3 separate units: retail, office, and residence; Built in 1910 with an addition in the mid‑1970s; brick and frame construction
