98-Room Motel for
For Sale
$3,900,000
3200 W Russell St, Sioux Falls, SD 57107
98 guestrooms, manager's apartment, and brand conversion opportunity available.
Property Size54,722 SF
Days on Market205
Property Features for 3200 W Russell St
General Information
Standard status
Active
Size
54,722 SF
Property subtype
Hospitality
Building Details
Building Size
54,722 SF
Year Built
1975
Listing Agency:
NAI Sioux Falls
(605) 351-1218
Listed By:
Dale Zomer · License #16458
(605) 351-1218
Source:
Siouxfallscommercial
Added: Jan 27
Changed: Aug 12
Last Checked: Aug 19 at 5:13AM
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 NAI Sioux Falls
Investment Insights
Based on property information with market context.
This two-story motel features interior corridors and includes 98 guestrooms plus a manager’s apartment. The property presents a Hilton, IHG, and other brand conversion opportunity. The revenue for the twelve months ending June 2024 was $1,377,953, with an occupancy rate of 70% and an ADR of $53.92. The NOI for the same period was $274,033, representing a net operating percentage of 19.9%. The property is located in an expanding market with a growing population and is offered at a discount to replacement cost.
Key Highlights
- Strong Revenue: $1,377,953 (T12 June 2024)
- Solid Occupancy Rate: 70% (T12 June 2024)
- Attractive NOI: $274,033 (T12 June 2024)
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
$306,925
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
7.87%
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%
$6,138,500
$6.1M
Cap Rate 7%
$4,384,643
$4.4M
Cap Rate 9%
$3,410,278
$3.4M
Market Conditions
NOI Build-Up for 54,722 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
$788.0K $14.40/SF
− Vacancy
−$141.8K −$2.59/SF
EGI
$646.2K $11.81/SF
− OpEx
−$339.2K −$6.20/SF
NOI
$306.9K $5.61/SF
Area
Sioux Falls, SD
Vacancy
18.00%
Lease Rate
$14.40 /SF/Yr
Expense Ratio
52.50%
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%
$6,138,500
Cap Rate 7%
$4,384,643
Cap Rate 9%
$3,410,278
Alternative Uses
Best Use
Hotel Hospitality
$4.38M
$3.84M – $5.12M
NOI $306,925 @ 7.0% cap · market cap 7.87%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$14.86M
$13.00M – $17.34M
NOI $1,040,156 @ 7.0% cap · market cap 26.67%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
202
Businesses Nearby
Well-served
Demand for This Use
Explore this area
Business Placement
Demographics for 57107, SD
11,915
Population
4,851
Households
2.5
Avg Household Size
32
Median Age
30%
College-Educated
91%
High-School Grad
46.8 sq mi
ZIP Area
255
Density / Sq Mi
$76,719
Median Household Income
$46,126
Median Earnings
$1,079
Median Rent
$250,700
Median Home Value
Questions? Ask Rey
Realmo’s AI knows this listing — price, zoning, demand, history. Ask anything.
Similar Off Market Nearby
- Sleep Inn Airport — 1500 N Kiwanis Ave, Sioux Falls, SD 57104
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- Golden Coin Casino — Sioux Falls, SD 57104
- Arena Motel — 2401 russell st, sioux falls, sd 57104
- Baymont by Wyndham Sioux Falls North/I-29/Russell St — 3101 W Russell St, Sioux Falls, SD 57107
Frequently Asked Questions
What type of property is this?
Motel - 98 guestrooms, manager's apartment, and brand conversion opportunity available.
Where is this motel located?
The property is located at 3200 W Russell St Sioux Falls, SD.
What is the asking price?
The asking price for this property is $3,900,000.
What are key features of this property?
This property features: Strong Revenue: $1,377,953 (T12 June 2024); Solid Occupancy Rate: 70% (T12 June 2024); Attractive NOI: $274,033 (T12 June 2024)
