Value Add Strip Mall
For Sale
$3,400,000
3404 E Thomas Rd, Phoenix, AZ 85018
Strip mall in high-traffic area with significant upside potential.
Property Size21,930 SF
Price / SF$155.04
Days on Market160
Property Features for 3404 E Thomas Rd
General Information
Standard status
Active
Size
21,930 SF
Property subtype
Shopping Strip
Amenities
86% occupied retail center with 2 vacant suites offering immediate upside through lease up and repositioning
In place rents average approximately $8.87 per square foot compared to market rents near $18.00 per square foot
Nearby Walmart in the 13th percentile and a Home Depot in the 5th percentile for visitation nationally
Building Details
Building Size
21,930 SF
Year Built
1960
Listed By:
ORascon Rascon · License #License(s): AZ: SA704894000
(602) 687-6762
Source:
Marcusmillichap
Added: Apr 3
Changed: Aug 8
Last Checked: Aug 31 at 12:50PM
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 ORascon Rascon
Investment Insights
Based on property information with market context.
This strip mall property is located in a high-traffic retail corridor with frontage on Thomas Road, which sees approximately 40,834 vehicles per day. The property is situated directly across from 320 new multifamily units that are coming online. The center is 86% occupied and features below-market rents, averaging approximately $8.00 per square foot, while the market achieves closer to $18.00 per square foot. This creates near-term upside through lease-up and repricing. A neighborhood retail center anchored by a Walmart and a Home Depot is located down the road. The Walmart is in the 13th percentile and the Home Depot is in the 5th percentile for visitation, according to Placer.ai. The property's high-traffic setting and limited nearby retail supply support durable tenant demand and immediate upside. The property size is 21930 square feet.
Key Highlights
- High‑traffic location on Thomas Road with approximately 40,834 vehicles per day.
- Significant upside potential through lease‑up of 2 vacant suites.
- Below‑market rents averaging $8.00 per square foot compared to market rents of $18.00 per square foot.
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
$247,857
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
7.29%
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%
$4,957,140
$5.0M
Cap Rate 7%
$3,540,814
$3.5M
Cap Rate 9%
$2,753,967
$2.8M
Market Conditions
NOI Build-Up for 21,930 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
$394.7K $18.00/SF
− Vacancy
−$40.7K −$1.85/SF
EGI
$354.1K $16.15/SF
− OpEx
−$106.2K −$4.84/SF
NOI
$247.9K $11.30/SF
Area
Phoenix, AZ
Vacancy
10.30%
Lease Rate
$18.00 /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%
$4,957,140
Cap Rate 7%
$3,540,814
Cap Rate 9%
$2,753,967
Alternative Uses
Best Use
Retail
$3.54M
$3.10M – $4.13M
NOI $247,857 @ 7.0% cap · market cap 7.29%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$6.64M
$5.81M – $7.75M
NOI $464,995 @ 7.0% cap · market cap 13.68%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
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Current Use
Location Intelligence
Trade Area within ½ mile
970
Businesses Nearby
Explore this area
Business Placement
Demographics for 85018, AZ
37,944
Population
19,487
Households
1.9
Avg Household Size
40
Median Age
57%
College-Educated
92%
High-School Grad
15.1 sq mi
ZIP Area
2,513
Density / Sq Mi
$87,637
Median Household Income
$58,555
Median Earnings
$1,411
Median Rent
$805,800
Median Home Value
Check the figures for this property
Cap Rate, Value Estimation, Potential NOI and more
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Market
Vacancy Rate% for Retail in Phoenix, AZ
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Strip mall - Strip mall in high-traffic area with significant upside potential.
Where is this strip mall located?
The property is located at 3404 E Thomas Rd Phoenix, AZ.
What is the asking price?
The asking price for this property is $3,400,000.
What are key features of this property?
This property features: High‑traffic location on Thomas Road with approximately 40,834 vehicles per day.; Significant upside potential through lease‑up of 2 vacant suites.; Below‑market rents averaging $8.00 per square foot compared to market rents of $18.00 per square foot.
