Second-Generation Restaurant
New
For Sale
$200,000
47 REHOBOTH AVENUE, Rehoboth Beach, DE 19971
Fully built-out food service space with existing equipment, seating, and an optional franchise operation.
Property Size2,000 SF
Price / SF$100
Days on Market5
Property Features for 47 REHOBOTH AVENUE
General Information
Standard status
Active
Size
2,000 SF
Property subtype
Business
Restaurant
Seating Capacity
24
Grease Trap
Yes
Equipment Included
Yes
Additional Details
Furnished
Yes
Business Included
Yes
Building Details
Year Built
1970
Listing Agency:
DSM COMMERCIAL
Listed By:
BRITTANY DANAHY · License #RB-0020210
(302) 227-0768
Source:
Cummingsrealtors
Added: Sep 20
Changed: Sep 23
Last Checked: Sep 24 at 8:39AM
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 DSM COMMERCIAL
Investment Insights
Based on property information with market context.
This second-generation restaurant space is built out for food service and measures approximately 2,000 SF. The layout accommodates approximately 24 patrons and includes furniture, fixtures, equipment, a 50-gallon grease trap, and dual HVAC systems replaced in 2025. Storefront glass was upgraded in 2023, providing a refreshed customer-facing frontage.
The space is positioned on the first block of Rehoboth Avenue beside Louie's Pizza in downtown Rehoboth Beach. Its location offers street frontage, pedestrian visibility, and signage exposure along the retail corridor. Rita's has operated at the property since 2017, and the franchise may be continued or replaced with another food-service concept.
The existing lease runs through 12/31/2026, with a new 10-year option available.
The space is positioned on the first block of Rehoboth Avenue beside Louie's Pizza in downtown Rehoboth Beach. Its location offers street frontage, pedestrian visibility, and signage exposure along the retail corridor. Rita's has operated at the property since 2017, and the franchise may be continued or replaced with another food-service concept.
The existing lease runs through 12/31/2026, with a new 10-year option available.
Key Highlights
- Approximately 2,000 SF restaurant space with seating for approximately 24 patrons
- Second‑generation food‑service buildout with furniture, fixtures, and equipment included
- 50‑gallon grease trap and dual HVAC systems replaced in 2025
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
$17,929
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
8.96%
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%
$358,580
$358.6K
Cap Rate 7%
$256,129
$256.1K
Cap Rate 9%
$199,211
$199.2K
Market Conditions
NOI Build-Up for 2,000 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
$27.6K $13.80/SF
− Vacancy
−$2.0K −$0.99/SF
EGI
$25.6K $12.81/SF
− OpEx
−$7.7K −$3.84/SF
NOI
$17.9K $8.96/SF
Area
Sussex County, DE
Vacancy
7.20%
Lease Rate
$13.80 /SF/Yr
Expense Ratio
30.00%
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%
$358,580
Cap Rate 7%
$256,129
Cap Rate 9%
$199,211
Alternative Uses
Best Use
Specialty Retail
$346.0K
$302.7K – $403.7K
NOI $24,219 @ 7.0% cap · market cap 12.11%
Second Best
Retail
$256.1K
$224.1K – $298.8K
NOI $17,929 @ 7.0% cap · market cap 8.96%
Theoretical Best
Office A
$549.6K
$480.9K – $641.2K
NOI $38,472 @ 7.0% cap · market cap 19.24%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Current Use
Lease Details
Turnkey business
Opportunity
Yes
Grease trap
Location Intelligence
Trade Area within ½ mile
658
Businesses Nearby
15k
Monthly Visits Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Foot Traffic Nearby
Dining 88%
Electronics 7%
Shops & Services 5%
Big Fish Grill
Dining
13,426 visits/mo
0.3 miles
Verizon
Electronics
1,090 visits/mo
0.3 miles
Fulton Bank
Shops & Services
799 visits/mo
0.3 miles
Demographics for 19971, DE
14,348
Population
16,948
Households
0.8
Avg Household Size
60
Median Age
55%
College-Educated
96%
High-School Grad
18.0 sq mi
ZIP Area
797
Density / Sq Mi
$103,301
Median Household Income
$49,905
Median Earnings
$1,383
Median Rent
$561,300
Median Home Value
Market
Vacancy Rate% for Retail 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?
Conventional restaurant - Fully built-out food service space with existing equipment, seating, and an optional franchise operation.
Where is this conventional restaurant located?
The property is located at 47 REHOBOTH AVENUE Rehoboth Beach, DE.
What is the asking price?
The asking price for this property is $200,000.
What are key features of this property?
This property features: Approximately 2,000 SF restaurant space with seating for approximately 24 patrons; Second‑generation food‑service buildout with furniture, fixtures, and equipment included; 50‑gallon grease trap and dual HVAC systems replaced in 2025
