Dripping Springs Prime Commercial
For Sale
$14,500,000
400 Old Highway 290, Dripping Springs, TX 78620
22.7 acres with 2,700' frontage in central Dripping Springs.
Property Size18,060 SF
Lot Size22.70 Acres
Price / SF$802.88
Days on Market1318
Property Features for 400 Old Highway 290
General Information
Standard status
Active
Size
18,060 SF
Total Parking Spaces
26
Lot size
22.70 Acres
Property subtype
Commercial Sale / Mixed Use
Zoning
CS - Commercial Zoning
Taxes and HOA fees
Annual Taxes
$38,506
Building Details
Year Built
2001
Buildings
3
Listing Agency:
David Foster, Broker
(512) 751-1100
Listed By:
David Foster · License #0519039
(512) 751-1100
Source:
Compass
Added: Dec 29, 2022
Changed: Aug 8
Last Checked: Aug 8 at 1:21PM
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 David Foster, Broker
Investment Insights
Based on property information with market context.
This 22.7-acre property, comprised of two lots, is located directly across from Dripping Springs High School. It features approximately 2,700 feet of combined frontage on the new Roger Hanks Parkway extension, linking RR 12 to Hwy 290, and along Old U. S. 290. City water is available on the property, while the existing facility and house utilize septic systems. The property has assignments from the city of 63 LUEs, with the potential for 30 additional LUEs once city sewer is available. Included on the acreage is a 16,006-square-foot facility, previously used as a private school and formerly a memory care center, making it suitable for assisted living, memory care, rehab, a mini-hospital, office space, or a wellness center. The facility includes 17 rooms, 22 bathrooms (including 4 showers), a large dining room and kitchen, a large fitness room, meeting rooms, waiting rooms, offices, and courtyards. The commercially zoned property also includes a 2,054-square-foot house, currently leased to a private school, and a large metal building with an office. The seller maintains a wildlife tax exemption. The property could potentially be used as multi-family. A popular hospital once considered the location for a build-to-suit physical rehab center along Roger Hanks.
Key Highlights
- Prime commercial location: 22.7 acres with approximately 2,700' combined frontage.
- High development potential: Zoned commercial with existing LUEs and potential for more, including multi‑family.
- Large existing 16,006 SF facility featuring 17 rooms and 22 bathrooms, suitable for various uses.
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
$430,650
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
2.97%
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%
$8,613,000
$8.6M
Cap Rate 7%
$6,152,143
$6.2M
Cap Rate 9%
$4,785,000
$4.8M
Market Conditions
NOI Build-Up for 18,060 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
$758.5K $42.00/SF
− Vacancy
−$184.3K −$10.21/SF
EGI
$574.2K $31.79/SF
− OpEx
−$143.5K −$7.95/SF
NOI
$430.6K $23.85/SF
Area
Hays County, TX
Vacancy
24.30%
Lease Rate
$42.00 /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%
$8,613,000
Cap Rate 7%
$6,152,143
Cap Rate 9%
$4,785,000
Alternative Uses
Best Use
Office B
$6.15M
$5.38M – $7.18M
NOI $430,650 @ 7.0% cap · market cap 2.97%
Second Best
Apartment 5plus
$3.95M
$3.46M – $4.61M
NOI $276,845 @ 7.0% cap · market cap 1.91%
Theoretical Best
Office A
$7.55M
$6.61M – $8.81M
NOI $528,467 @ 7.0% cap · market cap 3.64%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
365
Businesses Nearby
Explore this area
Business Placement
Demographics for 78620, TX
20,493
Population
7,929
Households
2.6
Avg Household Size
43
Median Age
62%
College-Educated
97%
High-School Grad
175.6 sq mi
ZIP Area
117
Density / Sq Mi
$146,551
Median Household Income
$58,583
Median Earnings
$1,674
Median Rent
$624,800
Median Home Value
Market
Vacancy Rate% for Office in South region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Mixed-use property - 22.7 acres with 2,700' frontage in central Dripping Springs.
Where is this mixed-use property located?
The property is located at 400 Old Highway 290 Dripping Springs, TX.
What is the asking price?
The asking price for this property is $14,500,000.
What are key features of this property?
This property features: Prime commercial location: 22.7 acres with approximately 2,700' combined frontage.; High development potential: Zoned commercial with existing LUEs and potential for more, including multi‑family.; Large existing 16,006 SF facility featuring 17 rooms and 22 bathrooms, suitable for various uses.
