Listing Agency: Oliver Smith Realty & Development Company Show Phone

Listed By: Oliver Smith · License #TN

Source: Crexi

Added: Aug 19, 2025 Changed: Aug 8 Last Checked: Jul 24 at 4:13PM

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Investment Insights

Based on property information with market context.

This 5,182 square-foot property, situated on 1.53 acres, is a vacant former Sonic restaurant. It features a drive-thru and 16 carhop bays, along with 41 parking spaces. The property is located at an I-75 interchange with a traffic count of 55,207. Nearby retailers and restaurants include McDonald’s, KFC, Cracker Barrel, Subway, Dollar General, Advance Auto, and Fast Pace Urgent Care. The surrounding area has the following demographics: within a 5-mile radius, the population is 11,099 with an average household income of $68,898; within a 7-mile radius, the population is 26,910 with an average household income of $77,591; and within a 10-mile radius, the population is 52,753 with an average household income of $72,657.

Key Highlights

• High Traffic Count: 55,207
• Includes FF&E (Furniture, Fixtures, and Equipment)
• Drive‑Thru and 16 Carhop Bays

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

$86,852

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

4.69%

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%

$1,737,040 $1.7M

Cap Rate 7%

$1,240,743 $1.2M

Cap Rate 9%

$965,022 $965.0K

Market Conditions

NOI Build-Up for 5,182 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

$121.3K $23.40/SF

− Vacancy

−$5.5K −$1.05/SF

EGI

$115.8K $22.35/SF

− OpEx

−$29.0K −$5.59/SF

NOI

$86.9K $16.76/SF

Area

Anderson County, TN

Vacancy

4.50%

Lease Rate

$23.40 /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%

$1,737,040

Cap Rate 7%

$1,240,743

Cap Rate 9%

$965,022

Alternative Uses

Best Use

Specialty Retail

$1.24M

$1.09M – $1.45M (±1% cap)

NOI $86,852 @ 7.0% cap · market cap 4.69%

Second Best

—

—

no second resolved use

Theoretical Best

Office A

$1.28M

$1.12M – $1.50M (±1% cap)

NOI $89,843 @ 7.0% cap · market cap 4.86%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

Property Profile

Current Use

Drive through restaurants

Suggested Use

Top Pick Real Estate Agency HVAC Service Electrical Service Law Firm Pharmacy Storage Facility

Score = modeled unmet demand for each use within ~1 mi (higher = bigger opportunity). Zoning and permitted uses should be independently verified with local authorities.

Location Intelligence

Trade Area within ½ mile

103

Businesses Nearby

145k

Monthly Visits Nearby

Explore this area Business Placement

Foot Traffic Nearby

Shops & Services 56% Dining 42% Home Improvements & Furnishings 1% Hotels & Casinos 1%

McDonald's Dining

30,862 visits/mo 0.1 miles

Weigel's Shops & Services

29,343 visits/mo 0.1 miles

Cracker Barrel Old Country Store Dining

23,892 visits/mo 0.2 miles

Rocky Top #1 Shops & Services

20,258 visits/mo 0.2 miles

Shell Shops & Services

14,552 visits/mo 0.2 miles

Demographics for 37769, TN

5,724

Population

2,855

Households

2

Avg Household Size

44

Median Age

11%

College-Educated

87%

High-School Grad

30.0 sq mi

ZIP Area

191

Density / Sq Mi

$51,691

Median Household Income

$38,417

Median Earnings

$700

Median Rent

$192,600

Median Home Value

Market

Vacancy Rate% for Retail in South region

7% 2020

6.2% 2021

5.1% 2022

4.8% 2023

4.9% 2024

5.4% 2025

Questions? Ask Rey

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Frequently Asked Questions

What type of property is this?

Drive through restaurant - 5,182 SF vacant restaurant with drive-thru and carhop bays.

Where is this drive through restaurant located?

The property is located at 539 N Main St Lake City, TN.

What is the asking price?

The asking price for this property is $1,850,000.

What are key features of this property?

This property features: High Traffic Count: 55,207; Includes FF&E (Furniture, Fixtures, and Equipment); Drive‑Thru and **16 Carhop Bays**