Multi-Use Retail Building with Overhead
For Sale
$1,985,000
274 N US-31 S, Traverse City, MI 49685
COMMERCIAL - Traverse City, MI
Property Size8,250 SF
Lot Size2.90 Acres
Price / SF$240.61
Days on Market955
Property Features for 274 N US-31 S
General Information
Property type
Commercial Sale
Property subtype
Retail
Zoning description
Commercial
Parking features
Parking Lot
Exterior features
Steel
Lot features
Corner Lot, Freestanding
Directions
Northeast corner of US 31 S and Sundowner Dr.
Subdivision
Grand Traverse
Standard status
Active
Size
8,250 SF
Lot size
2.90 Acres
Taxes and HOA fees
Tax Description
COM W1/4 COR SEC 33 T27N R11W TH S 1000 TO POB TH S 414' TH E 305' TH N 414' TH W 305' TO POB EXC HWY ROW
Legal Description
COM W1/4 COR SEC 33 T27N R11W TH S 1000 TO POB TH S 414' TH E 305' TH N 414' TH W 305' TO POB EXC HWY ROW
Utilities
Water source
Private
Amenities
overhead doors
16' ceiling height
mezzanine offices
outside display space
Building Details
Building materials
Frame
Roof type
Asphalt
Listing Agency:
Three West, LLC
(231) 929-2955
Listed By:
David Frost · License #6501203019
(231) 929-2955
Added: Jan 12, 2024
Changed: Aug 4
Last Checked: Aug 24 at 6:06AM
MLS# 1918655
Copyright © 2026 Northern Great Lakes Realtors MLS. 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 remodeled retail property sits on a 2.89-acre parcel with substantial off-street parking and outdoor space for display. The building includes 7,104 square feet of main-floor space plus an additional 1,146 square feet on a second level, for a total of 8,250 square feet. Mezzanine offices overlook the sales floor, and there are four 14' x 14' overhead doors at the rear of the building. The ceiling height is 16 feet.
The site offers 414 feet of frontage on US 31 South and 304 feet on Sundowner Drive, with easy ingress and egress. US 31 South carried 25,600 cars per day in 2023.
The property is currently leased to two tenants, with stated annual rental income of $158,244 NNN. One tenant is leaving, and the remaining tenant can be moved.
The site offers 414 feet of frontage on US 31 South and 304 feet on Sundowner Drive, with easy ingress and egress. US 31 South carried 25,600 cars per day in 2023.
The property is currently leased to two tenants, with stated annual rental income of $158,244 NNN. One tenant is leaving, and the remaining tenant can be moved.
Key Highlights
- 2.89‑acre parcel with 414 ft of frontage on US 31 South and 304 ft on Sundowner Drive
- 8,250 SF retail building with 7,104 SF main level plus 1,146 SF second level
- Four 14' x 14' overhead doors at the rear and 16' ceiling height
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
$102,010
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
5.14%
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%
$2,040,200
$2.0M
Cap Rate 7%
$1,457,286
$1.5M
Cap Rate 9%
$1,133,444
$1.1M
Market Conditions
NOI Build-Up for 8,250 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
$158.4K $19.20/SF
− Vacancy
−$12.7K −$1.54/SF
EGI
$145.7K $17.66/SF
− OpEx
−$43.7K −$5.30/SF
NOI
$102.0K $12.36/SF
Area
Grand Traverse County, MI
Vacancy
8.00%
Lease Rate
$19.20 /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%
$2,040,200
Cap Rate 7%
$1,457,286
Cap Rate 9%
$1,133,444
Alternative Uses
Best Use
Retail
$1.46M
$1.28M – $1.70M
NOI $102,010 @ 7.0% cap · market cap 5.14%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$1.79M
$1.57M – $2.09M
NOI $125,453 @ 7.0% cap · market cap 6.32%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
25,600 VPD
Traffic count
Multi-tenant
Tenancy
Yes
Highway access
Yes
Paved road access
Location Intelligence
Trade Area within ½ mile
167
Businesses Nearby
Explore this area
Business Placement
Demographics for 49685, MI
20,856
Population
9,395
Households
2.2
Avg Household Size
40
Median Age
38%
College-Educated
95%
High-School Grad
54.2 sq mi
ZIP Area
385
Density / Sq Mi
$82,639
Median Household Income
$45,783
Median Earnings
$1,338
Median Rent
$309,200
Median Home Value
Market
Vacancy Rate% for Retail in Midwest region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Retail space - Remodeled retail building on a 2.89-acre lot with rear overhead doors, ample parking, and mezzanine office space.
Where is this retail space located?
The property is located at 274 N US-31 S Traverse City, MI.
What is the asking price?
The asking price for this property is $1,985,000.
What are key features of this property?
This property features: 2.89‑acre parcel with 414 ft of frontage on US 31 South and 304 ft on Sundowner Drive; 8,250 SF retail building with 7,104 SF main level plus 1,146 SF second level; Four 14' x 14' overhead doors at the rear and 16' ceiling height
