Downtown Raleigh Commercial
For Sale
$845,000
405 Morson, Raleigh, NC 27601
Commercial building near Downtown Raleigh with redevelopment potential.
Property Size2,025 SF
Lot Size0.08 Acres
Price / SF$417.28
Days on Market154
Property Features for 405 Morson
General Information
Standard status
Active
Size
2,025 SF
Lot size
0.08 Acres
Property subtype
Commercial
Taxes and HOA fees
Annual Taxes
$4,840
Building Details
Year Built
1910
Listing Agency:
CENTURY 21 TRIANGLE GROUP
(919) 720-4217
Listed By:
JOSE CRUZ LABRADA · License #312455
Source:
Corcoran
Added: Mar 9
Changed: Aug 8
Last Checked: Aug 8 at 6:29AM
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 CENTURY 21 TRIANGLE GROUP
Investment Insights
Based on property information with market context.
Located near Downtown Raleigh, the commercial building at 405 Morson St, Raleigh, NC, offers an opportunity for office users, investors, or future redevelopment. The property, with a size of approximately 2,025 SF, is zoned OX-3 (Office Mixed Use - up to 3 stories), which allows for various commercial and mixed-use applications. The OX-3 zoning permits building heights of up to three stories, creating potential for future expansion or redevelopment in one of Raleigh's rapidly growing urban areas. The property is suitable for professional offices, creative studios, small business headquarters, or live-work concepts, depending on permitted uses. Situated just minutes from Downtown Raleigh, the location provides convenient access to major employment centers, restaurants, retail, and surrounding residential neighborhoods. The area continues to see steady growth and redevelopment, making this property attractive for both owner-users and investors.
Key Highlights
- Prime location near Downtown Raleigh, offering convenient access to employment, restaurants, and retail.
- OX‑3 zoning allows for a variety of commercial and mixed‑use applications, including office, studio, and live‑work spaces.
- Redevelopment potential with zoning allowing for building heights up to three stories.
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
$28,052
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
3.32%
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%
$561,040
$561.0K
Cap Rate 7%
$400,743
$400.7K
Cap Rate 9%
$311,689
$311.7K
Market Conditions
NOI Build-Up for 2,025 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
$45.0K $22.20/SF
− Vacancy
−$7.6K −$3.73/SF
EGI
$37.4K $18.47/SF
− OpEx
−$9.4K −$4.62/SF
NOI
$28.1K $13.85/SF
Area
Raleigh, NC
Vacancy
16.80%
Lease Rate
$22.20 /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%
$561,040
Cap Rate 7%
$400,743
Cap Rate 9%
$311,689
Alternative Uses
Best Use
Office B
$400.7K
$350.7K – $467.5K
NOI $28,052 @ 7.0% cap · market cap 3.32%
Second Best
Mixed Use
$400.3K
$350.3K – $467.0K
NOI $28,021 @ 7.0% cap · market cap 3.32%
Theoretical Best
Specialty Retail
$556.5K
$487.0K – $649.3K
NOI $38,956 @ 7.0% cap · market cap 4.61%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
4,117
Businesses Nearby
Explore this area
Business Placement
Demographics for 27601, NC
9,965
Population
4,874
Households
2
Avg Household Size
32
Median Age
49%
College-Educated
88%
High-School Grad
1.8 sq mi
ZIP Area
5,536
Density / Sq Mi
$70,433
Median Household Income
$51,443
Median Earnings
$1,499
Median Rent
$572,600
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?
Office building - Commercial building near Downtown Raleigh with redevelopment potential.
Where is this office building located?
The property is located at 405 Morson Raleigh, NC.
What is the asking price?
The asking price for this property is $845,000.
What are key features of this property?
This property features: Prime location near Downtown Raleigh, offering convenient access to employment, restaurants, and retail.; OX‑3 zoning allows for a variety of commercial and mixed‑use applications, including office, studio, and live‑work spaces.; Redevelopment potential with zoning allowing for building heights up to three stories.
