C-1 Zoned Retail Office
For Sale
$600,000
506 E SOUTHERN E Avenue, Phoenix, AZ 85040
C-1 zoned commercial property with Southern Ave frontage and a detached apartment accessed by an alley.
Property Size2,125 SF
Price / SF$282.35
Days on Market236
Property Features for 506 E SOUTHERN E Avenue
General Information
Standard status
Active
Size
2,125 SF
Property subtype
Commercial/Industrial
Zoning
C-1
Additional Details
Road Access
Yes
Taxes and HOA fees
Annual Taxes
$2,855
Building Details
Year Built
1941
Listing Agency:
Casa De Guerrero Realty
(602) 268-0201
Listed By:
Jeff Guerrero · License #BR034131000
(602) 550-6341
Source:
Exitrealty
Added: Jan 15
Changed: Sep 7
Last Checked: Sep 7 at 7:10AM
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 Casa De Guerrero Realty
Investment Insights
Based on property information with market context.
This C-1 zoned commercial property is currently operating as a recording studio with long-term month-to-month tenants. The property includes a detached apartment in the back with alley access, supporting flexible on-site arrangements.
The building has Southern Ave frontage, providing exposure along the avenue. Permitted uses noted in the remarks include small retail, personal services, offices, and daycare.
An ownership opportunity is presented as well as owner-occupied or tenant-occupied planning, with an option structure referenced as OWC with 35% down in the remarks.
The building has Southern Ave frontage, providing exposure along the avenue. Permitted uses noted in the remarks include small retail, personal services, offices, and daycare.
An ownership opportunity is presented as well as owner-occupied or tenant-occupied planning, with an option structure referenced as OWC with 35% down in the remarks.
Key Highlights
- C‑1 zoned commercial property with frontage on Southern Ave
- Currently used as a recording studio with long‑term month‑to‑month tenants
- Permitted uses include small retail, personal services, offices, and daycare
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
$24,017
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
4.00%
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%
$480,340
$480.3K
Cap Rate 7%
$343,100
$343.1K
Cap Rate 9%
$266,856
$266.9K
Market Conditions
NOI Build-Up for 2,125 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
$38.3K $18.00/SF
− Vacancy
−$3.9K −$1.85/SF
EGI
$34.3K $16.15/SF
− OpEx
−$10.3K −$4.84/SF
NOI
$24.0K $11.30/SF
Area
Phoenix, AZ
Vacancy
10.30%
Lease Rate
$18.00 /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%
$480,340
Cap Rate 7%
$343,100
Cap Rate 9%
$266,856
Alternative Uses
Best Use
Retail
$343.1K
$300.2K – $400.3K
NOI $24,017 @ 7.0% cap · market cap 4.00%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$643.7K
$563.2K – $751.0K
NOI $45,058 @ 7.0% cap · market cap 7.51%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
Yes
Paved road access
Location Intelligence
Trade Area within ½ mile
630
Businesses Nearby
Balanced
Demand for This Use
Explore this area
Business Placement
Demographics for 85040, AZ
33,993
Population
11,962
Households
2.8
Avg Household Size
30
Median Age
15%
College-Educated
69%
High-School Grad
10.1 sq mi
ZIP Area
3,366
Density / Sq Mi
$57,890
Median Household Income
$36,355
Median Earnings
$1,193
Median Rent
$294,800
Median Home Value
Market
Vacancy Rate% for Retail in Phoenix, AZ
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Storefront property - C-1 zoned commercial property with Southern Ave frontage and a detached apartment accessed by an alley.
Where is this storefront property located?
The property is located at 506 E SOUTHERN E Avenue Phoenix, AZ.
What is the asking price?
The asking price for this property is $600,000.
What are key features of this property?
This property features: C‑1 zoned commercial property with frontage on Southern Ave; Currently used as a recording studio with long‑term month‑to‑month tenants; Permitted uses include small retail, personal services, offices, and daycare
