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    Grandfathered Phoenix Adult Club Opportunity Title is generated by Realmo AI

    2438 E McDowell Rd, Phoenix, AZ 85008

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    Unfinished adult club with grandfathered license in a busy area.

    Type:Retail, Hospitality, Special Purpose
    Property size:
    4,100 SF
    Price / SF:
    $195/SF
    Added:
    Apr 4, 2019
    Days on Market:
    2619
    Last Refresh:
    May 19 at 8:35 pm

    Property Features for 2438 E McDowell Rd

    General Information

    Standard status
    Active
    Size
    4,100 SF
    Property subtype
    Retail, Hospitality, Special Purpose

    We can help!

    Listing Contact
    H Winston Hines

    Listing agent H Winston Hines License #SC 13801

    Listing office HWH Properties

    Listing date Apr 4, 2019

    Source Crexi

    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 HWH Properties

    HighLights

    • Rare Series 6 Liquor License: One of only 27 in Arizona, covering liquor, beer, and wine.
    • Grandfathered Zoning: Existing strip club use is grandfathered in the city of Phoenix, AZ.
    • Below Market Lease Rate: Locked‑in lease at approximately $1.00 per square foot until 2038 with 3% annual increases.
    • Owner Financing Available: Seller carry‑back option possible for a qualified buyer.
    • Prime Location: High‑traffic commercial area near Scottsdale/Arcadia, close to major highways and a busy intersection.
    • Partially Remodeled: HVAC, bathrooms, and electrical are already finished, reducing initial renovation costs.

    Overview

    Located just west of Scottsdale in Phoenix, this unfinished adult club is available for sale in a busy commercial area near a highway. The property includes a Series 6 license and is grandfathered in the location. The sale includes a list of furniture, fixtures, and equipment (FFE). The property is approximately 4100 square feet with the potential to expand for kitchen space next door. The location is on the east side of Phoenix, near Scottsdale, in the Arcadia area. The Series 6 license covers liquor, beer, and wine. The property is zoned C2, and the strip club is grandfathered in the city of Phoenix. The club has been partially remodeled recently. HVAC, bathrooms, and electrical systems are finished. The club could accommodate 20-40 entertainers. It is located a little over a mile from two major highways and next door to a Pep Boys automotive shop. The intersection of McDowell and 24th Street is visible from the front of the club. The Biltmore/Arcadia area is a few miles away. There are approximately 60 parking spots available between the front and back of the building. The lease is locked in at approximately $1.00 per foot until 2038, with 3% annual increases. The property is intended for use as an adult club.

    Local Financial Insights For Specialty Retail

    Simulate Cap Rate and NOI

    NOI Build-Up
    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.

    Component $ $/SF
    Gross rent $88.6k $21.60
    − Vacancy −$7.1k −$1.73
    EGI $81.5k $19.87
    − OpEx −$20.4k −$4.97
    NOI $61.1k $14.90
    4,100 SF · lease $21.60/SF/yr · vacancy 8.00% · expense 25.00%

    Alternative Uses

    Best Use
    Specialty Retail
    $872.9K
    $763.8K – $1.02M (±1% cap)
    NOI $61,106 @ 7.0% cap · market cap 7.64%
    Second Best
    Retail
    $662.0K
    $579.2K – $772.3K (±1% cap)
    NOI $46,339 @ 7.0% cap · market cap 5.79%
    Theoretical Best
    Office A
    $1.27M
    $1.11M – $1.48M (±1% cap)
    NOI $88,695 @ 7.0% cap · market cap 11.09%
    Zoning and permitted uses should be independently verified with local authorities.
    Property Profile Location Intelligence

    Current Use by Public Records

    Premier Restaurant Supply ... Big Box & Wholesale Store

    Suggested Use

    Real Estate Agency Law Firm Restaurant Spa & Massage Center Dental Office Hair Salon Nail Salon Building Supply Gym & Fitness Center Pharmacy

    Zoning and permitted uses should be independently verified with local authorities.

    Similar Places Nearby

    • QuikTrip — 1420 N 24th St, Phoenix, AZ 85008
    • Rise Distilling Co. — 1934 E McDowell Rd, Phoenix, AZ 85006
    • Wren House Brewing Company — 2125 N 24th St, Phoenix, AZ 85008

    Location Insight

    • Map
    • Local Demand
    City
    Phoenix
    County
    Maricopa
    State
    Arizona
    Longitude
    -112.0283655
    Latitude
    33.4661538

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    FAQs

    What type of property is this?
    Night club - Unfinished adult club with grandfathered license in a busy area.
    Where is this night club located?
    The property is located at 2438 E McDowell Rd Phoenix, AZ.
    What is the asking price?
    The asking price for this property is $800,000.
    What are key features of this property?
    This property features: Rare Series 6 Liquor License: One of only 27 in Arizona, covering liquor, beer, and wine.; Grandfathered Zoning: Existing strip club use is grandfathered in the city of Phoenix, AZ.; Below Market Lease Rate: Locked‑in lease at approximately $1.00 per square foot until 2038 with 3% annual increases.
    We can help!
    Contact for Pricing
    Please call us for current price
    and status of this listing
    H Winston Hines
    Real Estate License ID: SC 13801
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    Realmo Value Estimations

    Realmo estimates a property’s market value using a proprietary methodology that incorporates public data and user-submitted information. This cumulative value is generated by integrating a variety of conventional and innovative methods. 

    Disclaimer

    These figures are not official appraisals and should not be used as a substitute for a valuation performed by a licensed appraiser.
    Actual market value may differ due to factors not captured in the data. Estimates are offered for informational purposes only, and users should conduct independent research before making financial or investment decisions.
    By using this feature, you acknowledge that Realmo is not responsible for actions taken based on these estimates.

    AI approach

    Realmo AI Method estimates property value using machine learning models trained on millions of comparable listings, transactions, and market signals. It analyzes property features, location intelligence data, and current market dynamics to predict the most probable market value in real time.

    Realmo CapRate Calculation

    Realmo calculates the Capitalization Rate (Cap Rate) to help estimate a property's potential return on investment. The Cap Rate is a fundamental metric in commercial real estate that measures the relationship between a property's net operating income and its market value.

    How We Calculate Cap Rate

    Cap Rate Formula:
    Cap Rate (%) = (Net Operating Income / Property Value) × 100

    Net Operating Income (NOI) Formula:
    NOI = Area × Lease Rate × (1 - Vacancy Rate) × (1 - Operating Expense Ratio)

    Components

    Net Operating Income (NOI) represents the annual income a property generates after operating expenses:

    • Area: Building square footage from property records
    • Lease Rate: Annual $/sqft based on market data for the property type and geographic location
    • Vacancy Rate: Percentage of unoccupied space based on market data for the property type and location
    • Operating Expense Ratio: Operating costs as a percentage of income, varies by property type

    Property Value is derived from:

    • Recent sale price (if available)
    • Statistical models using comparable sales
    • AI-powered valuation estimates

    Example Calculation

    For a 100,000 sqft Office Building:

    • Lease Rate: $25.00/sqft/year (market data for Office in this area)
    • Vacancy Rate: 8% (market data for Office in this area)
    • Operating Expense Ratio: 35% (typical for Office properties)
    • Property Value: $15,000,000

    Step 1: Calculate NOI

    NOI = 100,000 × $25.00 × (1 - 0.08) × (1 - 0.35)
    NOI = 100,000 × $25.00 × 0.92 × 0.65
    NOI = $1,495,000/year

    Step 2: Calculate Cap Rate

    Cap Rate = ($1,495,000 / $15,000,000) × 100
    Cap Rate = 9.97%

    Property Type Considerations

    Net Operating Income calculations vary by property type due to different operating expense ratios:

    • Office: Higher expenses (30-40%) for HVAC, utilities, maintenance
    • Retail: Moderate expenses (25-35%) for common area maintenance
    • Industrial/Warehouse: Lower expenses (15-25%) for minimal tenant services
    • Multifamily: Moderate expenses (35-45%) including property management
    • Self-Storage: Lower expenses (25-35%) due to minimal maintenance

    Market lease rates and vacancy rates are specific to each property type and geographic location, reflecting local market conditions.

    Disclaimer

    These calculations are estimates for informational purposes only and should not be used as a substitute for professional financial analysis or appraisal.

    • Cap Rate calculations depend on market data that may change over time
    • Actual operating expenses, lease rates, and vacancy rates may differ from market averages
    • Individual property conditions, lease terms, and tenant quality significantly impact actual NOI
    • Property value estimates are approximations and not official appraisals
    • Cap rates vary widely by market, property condition, and investment risk profile

    Professional Guidance Recommended: Before making any investment or financial decisions, consult with licensed appraisers, commercial real estate brokers, and financial advisors who can evaluate your specific property and circumstances.
    By using this feature, you acknowledge that Realmo is not responsible for investment decisions or actions taken based on these estimates.

    Cap approach

    Capitalization Method calculates value based on estimated net operating income (NOI) and applying a market-based capitalization rate (cap rate), we estimate what a typical investor might be willing to pay for it.

    Comparable approach

    Comparable estimate is based on recent sales of similar nearby properties, adjusted for factors like size, condition, and location.

    Relative

    Relative property class coefficient uses factors that account for typical price differences between various asset types (e.g., retail vs. industrial) to provide a more accurate market-aligned estimate.

    Geo

    Comparable Sales Method, enhanced by Geo coefficients — location-based adjustment factors that reflect differences in price levels across neighborhoods, cities, or regions ensuring a more accurate, market-sensitive valuation.

    Stat Estimate

    This method estimates value based on actual market adjusted recent (~5 years) sales of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all similar sales ($/sqft) are above this value
    • Range-to: 75% of all similar sales ($/sqft) are below this value
    AI Estimate

    This method estimates value based on AI market estimation of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all estimations ($/sqft) are above this value
    • Range-to: 75% of all estimations ($/sqft) are below this value
    Alternative use

    Estimate considers the property’s potential value if used for a different purpose-based on zoning, demand, and market feasibility.

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