Listing Agency: KW Black Hills Show Phone

Listed By: Chris Long · License #14881 Show Phone

Source: Moodyscre

Added: Aug 16, 2024 Changed: Aug 16 Last Checked: Sep 16 at 8:58PM

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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 KW Black Hills

Investment Insights

Based on property information with market context.

This restaurant building, completely remodeled in 2018, is centrally located near top attractions in the Black Hills, just outside of Hill City, SD. The property features a shaded outdoor patio with views of the Black Hills. The turn-key kitchen includes all equipment. A large, central bar is present, which would be ideal for a tap house or wine bar. The parking lot has 35+ parking spots. The location has consistently produced over $800,000 in gross sales while only being open seasonally. The building size is 4,960 square feet. The property neighbors Firehouse Campground & Cabins. Note that only the real estate is for sale; the business is not included.

Key Highlights

• Location boasts a proven track record of $800,000+ in gross sales operating seasonally.
• Turn‑key kitchen with all equipment included.
• Restaurant building completely remodeled in 2018.

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

$62,942

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

7.00%

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%

$1,258,840 $1.3M

Cap Rate 7%

$899,171 $899.2K

Cap Rate 9%

$699,356 $699.4K

Market Conditions

NOI Build-Up for 4,960 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

$89.3K $18.00/SF

− Vacancy

−$5.4K −$1.08/SF

EGI

$83.9K $16.92/SF

− OpEx

−$21.0K −$4.23/SF

NOI

$62.9K $12.69/SF

Area

Pennington County, SD

Vacancy

6.00%

Lease Rate

$18.00 /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%

$1,258,840

Cap Rate 7%

$899,171

Cap Rate 9%

$699,356

Alternative Uses

Best Use

Specialty Retail

$899.2K

$786.8K – $1.05M (±1% cap)

NOI $62,942 @ 7.0% cap · market cap 7.00%

Second Best

Retail

$821.4K

$718.7K – $958.3K (±1% cap)

NOI $57,496 @ 7.0% cap · market cap 6.40%

Theoretical Best

—

—

same as Best Use

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

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Open Analytics

Current Use

Turn key restaurants

Suggested Use

Top Pick Auto Repair Shop Grocery & Convenience Store Catering Service Cafe & Coffee Shop Building Supply Tattoo & Piercing Shop

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

34

Businesses Nearby

Well-served

Demand for This Use

Explore this area Business Placement

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

Similar Off Market Nearby

• The Prairie Dog Food Truck — 23845 US-385, Hill City, SD 57745

Frequently Asked Questions

What type of property is this?

Restaurant - Remodeled restaurant with outdoor patio near Black Hills attractions.

Where is this restaurant located?

The property is located at 23858 Hwy 385 Hill City, SD.

What is the asking price?

The asking price for this property is $899,000.

What are key features of this property?

This property features: Location boasts a proven track record of $800,000+ in gross sales operating seasonally.; Turn‑key kitchen with all equipment included.; Restaurant building completely remodeled in 2018.