Office Building with Modified Gross
For Sale
$959,000
408 Us Highway 206, Hillsborough, NJ 08844
The building supports a modified gross lease structure with defined landlord and tenant responsibilities.
Property Size2,824 SF
Days on Market88
Property Features for 408 Us Highway 206
General Information
Standard status
Active
Size
2,824 SF
Total Parking Spaces
13
Property subtype
Commercial
Zoning
Business
Lease Type
Gross
Building Details
Building Size
2,824 SF
Year Built
1958
Stories
2
Units
1
Listing Agency:
Weichert Realtors
(609) 921-1900
Listed By:
John Kanabay
Source:
Betterhomerealestate
Added: Jun 5
Changed: Aug 28
Last Checked: Aug 28 at 11:30AM
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 Weichert Realtors
Investment Insights
Based on property information with market context.
This office building contains 2,824 SF and was constructed in 1958. The property is offered for sale or lease and includes an operating wealth management firm managed by the landlord.
The lease structure is modified gross. The landlord covers taxes, structural obligations, and shared lawn service expenses, while tenants handle utilities, HVAC systems, interior maintenance, trash, and snow removal. The property is located at 408 US Highway 206 in Hillsborough Township, New Jersey.
The lease structure is modified gross. The landlord covers taxes, structural obligations, and shared lawn service expenses, while tenants handle utilities, HVAC systems, interior maintenance, trash, and snow removal. The property is located at 408 US Highway 206 in Hillsborough Township, New Jersey.
Key Highlights
- 2,824 SF office building constructed in 1958
- Offered for sale or lease
- Modified gross lease structure
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
$43,207
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
4.51%
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%
$864,140
$864.1K
Cap Rate 7%
$617,243
$617.2K
Cap Rate 9%
$480,078
$480.1K
Market Conditions
NOI Build-Up for 2,824 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
$84.7K $30.00/SF
− Vacancy
−$27.1K −$9.60/SF
EGI
$57.6K $20.40/SF
− OpEx
−$14.4K −$5.10/SF
NOI
$43.2K $15.30/SF
Area
Somerset County, NJ
Vacancy
32.00%
Lease Rate
$30.00 /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%
$864,140
Cap Rate 7%
$617,243
Cap Rate 9%
$480,078
Alternative Uses
Best Use
Office B
$617.2K
$540.1K – $720.1K
NOI $43,207 @ 7.0% cap · market cap 4.51%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$737.4K
$645.2K – $860.3K
NOI $51,618 @ 7.0% cap · market cap 5.38%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
789
Businesses Nearby
Explore this area
Business Placement
Demographics for 08844, NJ
43,333
Population
16,168
Households
2.7
Avg Household Size
42
Median Age
62%
College-Educated
96%
High-School Grad
55.2 sq mi
ZIP Area
785
Density / Sq Mi
$153,785
Median Household Income
$74,977
Median Earnings
$2,171
Median Rent
$537,300
Median Home Value
Market
Vacancy Rate% for Office in Northeast region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Office building - The building supports a modified gross lease structure with defined landlord and tenant responsibilities.
Where is this office building located?
The property is located at 408 Us Highway 206 Hillsborough, NJ.
What is the asking price?
The asking price for this property is $959,000.
What are key features of this property?
This property features: 2,824 SF office building constructed in 1958; Offered for sale or lease; Modified gross lease structure
