Permit-Ready Corner Retail
For Sale
Contact for pricing
503 East Third Street, Lexington, KY 40508
Gutted, permit-ready corner shell on a signalized intersection with a submitted plan for three-front retail.
Property Size8,260 SF
Price / SF$133.17
Days on Market57
Property Features for 503 East Third Street
General Information
Standard status
Active
Size
8,260 SF
Property subtype
Retail, Office
Zoning
B-1
Building Details
Year Built
1938
Buildings
1
Stories
1
Listing Agency:
Guide Realty
Listed By:
Raquel Carter · License #KY203070
Source:
Crexi
Added: Jun 16
Changed: Aug 8
Last Checked: Aug 11 at 11:27AM
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 Guide Realty
Investment Insights
Based on property information with market context.
This property is a fully gutted, permit-ready commercial shell designed for flexibility. A building permit has been submitted for 8,260 SF of three-front retail configuration, and the property is offered as-is, allowing the next owner to control buildout decisions from scratch. The existing shell condition positions the space for a tailored tenant improvement strategy rather than working around prior finishes.
The building sits at a signalized corner at East Third and Midland Avenue, which functions as an Eastern Gateway to Downtown Lexington and the Historic East End. Public remarks note that multiple developments and destinations are within walking distance, including The Met Lex, DV8 Kitchen, the Lyric Theatre, the Isaac Murphy Memorial Art Garden, and the Artist Village.
For buyers seeking an owner-user or value-add approach, the submitted three-front retail plan can support different leasing outcomes. The proposed layout is described as three suites sized for individual tenancy (1,730 SF, 3,628 SF, and 2,895 SF), with the ability to combine suites for a single user or reconfigure the space. B-1 Neighborhood Business zoning is stated to permit retail, restaurant, medical, office, and personal service uses by right, supporting a range of commercial concepts.
The building sits at a signalized corner at East Third and Midland Avenue, which functions as an Eastern Gateway to Downtown Lexington and the Historic East End. Public remarks note that multiple developments and destinations are within walking distance, including The Met Lex, DV8 Kitchen, the Lyric Theatre, the Isaac Murphy Memorial Art Garden, and the Artist Village.
For buyers seeking an owner-user or value-add approach, the submitted three-front retail plan can support different leasing outcomes. The proposed layout is described as three suites sized for individual tenancy (1,730 SF, 3,628 SF, and 2,895 SF), with the ability to combine suites for a single user or reconfigure the space. B-1 Neighborhood Business zoning is stated to permit retail, restaurant, medical, office, and personal service uses by right, supporting a range of commercial concepts.
Key Highlights
- Fully gutted commercial shell (1938) with a submitted building permit for 8,260 SF of three‑front retail
- B‑1 Neighborhood Business zoning; by‑right uses include retail, restaurant, medical, office, and personal service
- Corner location at E Third St & Midland Ave on a signalized intersection, with three proposed suites of 1,730 SF, 3,628 SF, and 2,895 SF
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
$92,330
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
8.39%
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%
$1,846,600
$1.8M
Cap Rate 7%
$1,319,000
$1.3M
Cap Rate 9%
$1,025,889
$1.0M
Market Conditions
NOI Build-Up for 8,260 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
$148.7K $18.00/SF
− Vacancy
−$25.6K −$3.10/SF
EGI
$123.1K $14.90/SF
− OpEx
−$30.8K −$3.73/SF
NOI
$92.3K $11.18/SF
Area
Lexington, KY
Vacancy
17.20%
Lease Rate
$18.00 /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%
$1,846,600
Cap Rate 7%
$1,319,000
Cap Rate 9%
$1,025,889
Alternative Uses
Best Use
Office B
$1.32M
$1.15M – $1.54M
NOI $92,330 @ 7.0% cap · market cap 8.39%
Second Best
Retail
$1.12M
$982.5K – $1.31M
NOI $78,598 @ 7.0% cap · market cap 7.15%
Theoretical Best
Office A
$1.72M
$1.51M – $2.01M
NOI $120,466 @ 7.0% cap · market cap 10.95%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,822
Businesses Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Demographics for 40508, KY
25,586
Population
11,458
Households
2.2
Avg Household Size
26
Median Age
36%
College-Educated
86%
High-School Grad
4.2 sq mi
ZIP Area
6,092
Density / Sq Mi
$28,040
Median Household Income
$13,316
Median Earnings
$900
Median Rent
$174,900
Median Home Value
Market
Vacancy Rate% for Office in South region
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Frequently Asked Questions
What type of property is this?
Storefront property - Gutted, permit-ready corner shell on a signalized intersection with a submitted plan for three-front retail.
Where is this storefront property located?
The property is located at 503 East Third Street Lexington, KY.
What is the asking price?
The asking price for this property is $1,100,000.
What are key features of this property?
This property features: Fully gutted commercial shell (1938) with a submitted building permit for 8,260 SF of three‑front retail; B‑1 Neighborhood Business zoning; by‑right uses include retail, restaurant, medical, office, and personal service; Corner location at E Third St & Midland Ave on a signalized intersection, with three proposed suites of 1,730 SF, 3,628 SF, and 2,895 SF
