Two-Story Office
For Sale
$850,000
427 N 38th Street, Waco, TX 76710
O-3 zoning permits office, daycare, salon, restaurant, school, and AirBnb/VRBO uses.
Property Size2,694 SF
Price / SF$315.52
Days on Market981
Property Features for 427 N 38th Street
General Information
Standard status
Active
Size
2,694 SF
Property subtype
Office
Zoning
O-3
Property Condition
Severity
Repairs Needed
Evidence
finish out the ground floor level, exterior and get going on the second level
Taxes and HOA fees
Annual Taxes
$2,165
Amenities
Central Air
3
O-3
Parking. Corner Lot.
Paved Driveway, Lot.
Corner, City Road, State Road, US Highway, Community Maintenance.
Building Details
Stories
2
Listing Agency:
The McLeod Company
(254) 644-4095
Listed By:
Matthew McLeod · License #575417
Source:
Xome
Added: Dec 23, 2023
Changed: Aug 30
Last Checked: Aug 30 at 6:35AM
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 The McLeod Company
Investment Insights
Based on property information with market context.
This two-story office building at 427 N 38th Street includes central air, parking, a paved driveway, and a corner-lot setting. The property is identified with O-3 zoning and offers a range of stated permitted uses, including office, daycare, salon, restaurant, school, and AirBnb/VRBO applications.
The property is in Waco, at the edge of the Castle Heights neighborhood and a few blocks from Valley Mills. Its setting includes access from a city road, state road, and US highway, with community-maintained surroundings. The existing configuration and zoning provide a broad commercial-use framework for the property.
The property is in Waco, at the edge of the Castle Heights neighborhood and a few blocks from Valley Mills. Its setting includes access from a city road, state road, and US highway, with community-maintained surroundings. The existing configuration and zoning provide a broad commercial-use framework for the property.
Key Highlights
- Two‑story office building at 427 N 38th Street, Waco, TX 76710
- O‑3 zoning
- Central air
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
$37,454
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
4.41%
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%
$749,080
$749.1K
Cap Rate 7%
$535,057
$535.1K
Cap Rate 9%
$416,156
$416.2K
Market Conditions
NOI Build-Up for 2,694 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
$59.8K $22.20/SF
− Vacancy
−$9.9K −$3.66/SF
EGI
$49.9K $18.54/SF
− OpEx
−$12.5K −$4.63/SF
NOI
$37.5K $13.90/SF
Area
Waco, TX
Vacancy
16.50%
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%
$749,080
Cap Rate 7%
$535,057
Cap Rate 9%
$416,156
Alternative Uses
Best Use
Office B
$535.1K
$468.2K – $624.2K
NOI $37,454 @ 7.0% cap · market cap 4.41%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$710.8K
$621.9K – $829.2K
NOI $49,753 @ 7.0% cap · market cap 5.85%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
964
Businesses Nearby
Explore this area
Business Placement
Demographics for 76710, TX
24,874
Population
12,391
Households
2
Avg Household Size
38
Median Age
32%
College-Educated
92%
High-School Grad
9.3 sq mi
ZIP Area
2,675
Density / Sq Mi
$53,304
Median Household Income
$36,425
Median Earnings
$1,098
Median Rent
$229,000
Median Home Value
Market
Vacancy Rate% for Office in South region
Questions? Ask Rey
Realmo’s AI knows this listing — price, zoning, demand, history. Ask anything.
Frequently Asked Questions
What type of property is this?
Office building - O-3 zoning permits office, daycare, salon, restaurant, school, and AirBnb/VRBO uses.
Where is this office building located?
The property is located at 427 N 38th Street Waco, TX.
What is the asking price?
The asking price for this property is $850,000.
What are key features of this property?
This property features: Two‑story office building at 427 N 38th Street, Waco, TX 76710; O‑3 zoning; Central air
