Morgan Hill Industrial/Office
For Sale
$1,495,000
358 Digital Drive, Morgan Hill, CA 95037
Industrial/Office condominium in Morgan Hill, 4 minutes from Hwy 101.
Property Size3,932 SF
Price / SF$380.21
Days on Market429
Property Features for 358 Digital Drive
General Information
Standard status
Active
Size
3,932 SF
Building Details
Year Built
2003
Listing Agency:
RENZ & RENZ
Listed By:
CHRISTIAN RENZ
Source:
Corcoran
Added: Jun 19, 2025
Changed: Mar 16
Last Checked: Mar 16 at 9:08AM
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 RENZ & RENZ
Investment Insights
Based on property information with market context.
This 3,932-square-foot industrial/office condominium features multiple private offices on both the first and second floors. It includes two private bathrooms and warehouse space with a grade-level roll-up door. The condo association dues cover professional landscaping, trash removal, roof maintenance, and structural upkeep. The property is located in the fast-growing Morgan Hill market, approximately 4 minutes from Highway 101. The warehouse area features a 20-foot clear height. This well-maintained property is suitable for many uses.
Key Highlights
- Convenient Location: Just 4 minutes from Hwy 101 in fast‑growing Morgan Hill.
- Versatile Space: Combination of private offices and warehouse space with a grade‑level roll‑up door.
- High Warehouse Ceiling: Benefit from a 20' warehouse clear 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
$79,693
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
5.33%
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%
$1,593,860
$1.6M
Cap Rate 7%
$1,138,471
$1.1M
Cap Rate 9%
$885,478
$885.5K
Market Conditions
NOI Build-Up for 3,932 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
$101.4K $25.80/SF
− Vacancy
−$7.7K −$1.96/SF
EGI
$93.8K $23.84/SF
− OpEx
−$14.1K −$3.58/SF
NOI
$79.7K $20.27/SF
Area
Santa Clara County, CA
Vacancy
7.58%
Lease Rate
$25.80 /SF/Yr
Expense Ratio
15.00%
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%
$1,593,860
Cap Rate 7%
$1,138,471
Cap Rate 9%
$885,478
Alternative Uses
Best Use
Office B
$1.98M
$1.73M – $2.31M
NOI $138,324 @ 7.0% cap · market cap 9.25%
Second Best
Warehouse
$1.14M
$996.2K – $1.33M
NOI $79,693 @ 7.0% cap · market cap 5.33%
Theoretical Best
Office A
$2.37M
$2.08M – $2.77M
NOI $166,167 @ 7.0% cap · market cap 11.11%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
859
Businesses Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Demographics for 95037, CA
53,126
Population
17,185
Households
3.1
Avg Household Size
41
Median Age
44%
College-Educated
90%
High-School Grad
120.1 sq mi
ZIP Area
442
Density / Sq Mi
$158,256
Median Household Income
$71,130
Median Earnings
$2,242
Median Rent
$1,152,400
Median Home Value
Market
Vacancy Rate% for Office in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Flex space - Industrial/Office condominium in Morgan Hill, 4 minutes from Hwy 101.
Where is this flex space located?
The property is located at 358 Digital Drive Morgan Hill, CA.
What is the asking price?
The asking price for this property is $1,495,000.
What are key features of this property?
This property features: Convenient Location: Just 4 minutes from Hwy 101 in fast‑growing Morgan Hill.; Versatile Space: Combination of private offices and warehouse space with a grade‑level roll‑up door.; High Warehouse Ceiling: Benefit from a 20' warehouse clear height.
