Freestanding Absolute NNN
New
For Sale
$2,430,000
237 SW 4th St, Madras, OR 97741
Single-tenant restaurant facility with an established operating history and long-term lease structure.
Property Size3,960 SF
Price / SF$613.64
Days on Market3
Property Features for 237 SW 4th St
General Information
Standard status
Active
Size
3,960 SF
Property subtype
Restaurant
Lease Type
Absolute Net
Net Operating Income
$162,840
Financials
Asking Price
$2,430,000
Cap Rate
6.7%
Amenities
Absolute NNN lease with tenant responsible for roof, structure & parking. Base term through May 2035 plus two 5-year options to 2045. Truly passive, de-risked ownership.
26-year operating history under Black Bear Diner's original franchisee. 2025 sales of $2.71M rival top system performers—remarkable for a city of ~7,800 residents.
Percentage rent pays greater of $142,500 base or 6% of sales, adding $20,340 of overage in 2025. Built-in 10% base bumps every 5 years deliver inflation-hedged, growing NOI.
Building Details
Building Size
3,960 SF
Tenancy
Single
Listing Agency:
Marcus & Millichap - Portland
(503) 200-2063
Listed By:
Sam Gfroerer · License #License(s): OR: 201254573
(503) 200-2063
Source:
Marcusmillichap
Added: Aug 28
Changed: Aug 29
Last Checked: Aug 29 at 10:12PM
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 Marcus & Millichap - Portland
Investment Insights
Based on property information with market context.
This freestanding, single-tenant property is occupied by Black Bear Diner and contains 3,960 square feet at 237 SW 4th St in Madras, Oregon. The restaurant has operated at the site for 26 years, providing an established operating platform within the property’s absolute NNN structure.
The lease includes a base term extending through 2035, two additional five-year options, and 10% base increases every five years. Rent also includes a percentage component equal to 6% of gross sales when that amount exceeds the base obligation. The property is positioned at a highway crossroads in Central Oregon and serves as a restaurant-oriented NNN asset with a long operating history.
The lease includes a base term extending through 2035, two additional five-year options, and 10% base increases every five years. Rent also includes a percentage component equal to 6% of gross sales when that amount exceeds the base obligation. The property is positioned at a highway crossroads in Central Oregon and serves as a restaurant-oriented NNN asset with a long operating history.
Key Highlights
- 3,960‑square‑foot freestanding restaurant property
- Single‑tenant absolute NNN lease structure
- Black Bear Diner has operated at the site for 26 years
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
$119,750
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
4.93%
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%
$2,395,000
$2.4M
Cap Rate 7%
$1,710,714
$1.7M
Cap Rate 9%
$1,330,556
$1.3M
Market Conditions
NOI Build-Up for 3,960 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
$166.3K $42.00/SF
− Vacancy
−$6.7K −$1.68/SF
EGI
$159.7K $40.32/SF
− OpEx
−$39.9K −$10.08/SF
NOI
$119.8K $30.24/SF
Area
Jefferson County, OR
Vacancy
4.00%
Lease Rate
$42.00 /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%
$2,395,000
Cap Rate 7%
$1,710,714
Cap Rate 9%
$1,330,556
Alternative Uses
Best Use
Specialty Retail
$1.71M
$1.50M – $2.00M
NOI $119,750 @ 7.0% cap · market cap 4.93%
Second Best
—
—
no second resolved use
Theoretical Best
—
—
same as Best Use
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
Single-tenant
Tenancy
Location Intelligence
Trade Area within ½ mile
639
Businesses Nearby
Explore this area
Business Placement
Demographics for 97741, OR
13,753
Population
4,777
Households
2.9
Avg Household Size
39
Median Age
21%
College-Educated
86%
High-School Grad
363.9 sq mi
ZIP Area
38
Density / Sq Mi
$69,696
Median Household Income
$37,641
Median Earnings
$993
Median Rent
$308,900
Median Home Value
Market
Vacancy Rate% for Retail in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
NNN property - Single-tenant restaurant facility with an established operating history and long-term lease structure.
Where is this nnn property located?
The property is located at 237 SW 4th St Madras, OR.
What is the asking price?
The asking price for this property is $2,430,000.
What are key features of this property?
This property features: 3,960‑square‑foot freestanding restaurant property; Single‑tenant absolute NNN lease structure; Black Bear Diner has operated at the site for 26 years
