Second-Generation Restaurant
For Sale
$2,345,500
Pending
279-1041 E State Route 89a, Cottonwood, AZ 86326
Purpose-built restaurant space with an established dine-in layout and existing infrastructure.
Property Size6,437 SF
Days on Market125
Property Features for 279-1041 E State Route 89a
General Information
Standard status
Pending
Size
6,437 SF
Additional Details
Highway Access
Yes
Taxes and HOA fees
Annual Taxes
$15,722
Listing Agency:
R.O.I. Properties
(602) 319-1326
Listed By:
Beth Jo Zeitzer · License #BR044331000
(602) 319-1326
Source:
Exprealty
Added: Apr 13
Changed: Aug 15
Last Checked: Aug 15 at 9:39AM
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 R.O.I. Properties
Investment Insights
Based on property information with market context.
This 6,437-square-foot restaurant property was purpose-built for dine-in service and retains an established operational footprint. Existing restaurant infrastructure is in place, supporting reuse by an operator seeking to avoid starting with a vacant shell.
The property is positioned along State Route 89A in Cottonwood, a corridor serving local residents and travelers between Cottonwood and Sedona. The site was formerly occupied by Black Bear Diner, providing a documented restaurant use for the building.
The property is positioned along State Route 89A in Cottonwood, a corridor serving local residents and travelers between Cottonwood and Sedona. The site was formerly occupied by Black Bear Diner, providing a documented restaurant use for the building.
Key Highlights
- 6,437‑square‑foot restaurant property
- Purpose‑built for restaurant operations
- Established footprint for dine‑in service
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
$85,584
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
3.65%
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%
$1,711,680
$1.7M
Cap Rate 7%
$1,222,629
$1.2M
Cap Rate 9%
$950,933
$950.9K
Market Conditions
NOI Build-Up for 6,437 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
$122.0K $18.96/SF
− Vacancy
−$7.9K −$1.23/SF
EGI
$114.1K $17.73/SF
− OpEx
−$28.5K −$4.43/SF
NOI
$85.6K $13.30/SF
Area
Yavapai County, AZ
Vacancy
6.50%
Lease Rate
$18.96 /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%
$1,711,680
Cap Rate 7%
$1,222,629
Cap Rate 9%
$950,933
Alternative Uses
Best Use
Specialty Retail
$1.22M
$1.07M – $1.43M
NOI $85,584 @ 7.0% cap · market cap 3.65%
Second Best
—
—
no second resolved use
Theoretical Best
Warehouse
$2.16M
$1.89M – $2.52M
NOI $150,946 @ 7.0% cap · market cap 6.44%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Current Use
Lease Details
Yes
Highway access
Location Intelligence
Trade Area within ½ mile
1,070
Businesses Nearby
806
Monthly Visits Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Foot Traffic Nearby
Shops & Services 100%
National Bank Of Arizona
Shops & Services
806 visits/mo
0.1 miles
Demographics for 86326, AZ
24,465
Population
12,243
Households
2
Avg Household Size
49
Median Age
25%
College-Educated
91%
High-School Grad
45.5 sq mi
ZIP Area
538
Density / Sq Mi
$58,250
Median Household Income
$36,479
Median Earnings
$1,102
Median Rent
$312,400
Median Home Value
Market
Vacancy Rate% for Retail in West region
Questions? Ask Rey
Realmo’s AI knows this listing — price, zoning, demand, history. Ask anything.
Frequently Asked Questions
What type of property is this?
Conventional restaurant - Purpose-built restaurant space with an established dine-in layout and existing infrastructure.
Where is this conventional restaurant located?
The property is located at 279-1041 E State Route 89a Cottonwood, AZ.
What is the asking price?
The asking price for this property is $2,345,500.
What are key features of this property?
This property features: 6,437‑square‑foot restaurant property; Purpose‑built for restaurant operations; Established footprint for dine‑in service
