Historic Gilroy Restaurant
For Sale
$1,575,000
Pending
55 5th Street, Gilroy, CA 95020
Unique restaurant space in a historic brick building.
Property Size5,040 SF
Days on Market154
Property Features for 55 5th Street
General Information
Standard status
Pending
Size
5,040 SF
Property subtype
Commercial/Industrial
Taxes and HOA fees
Annual Taxes
$1.00
Building Details
Year Built
1920
Listing Agency:
Renz & Renz
(408) 846-1031
Listed By:
Christian Renz · License #01911413
(408) 846-1031
Source:
Exitrealty
Added: Mar 24
Changed: Aug 23
Last Checked: Aug 23 at 5:26AM
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 Renz & Renz
Investment Insights
Based on property information with market context.
Located in Downtown Gilroy at 55 5th Street, this historic brick building, formerly the city's fire station, has been adapted into a restaurant space. The property features a full commercial kitchen, two bars, two walk-in refrigeration units, three restrooms, and multiple dining areas. First and second-floor outdoor seating areas enhance the dining experience. A new warranted TPO roof was installed in February 2025. Structural reinforcements have been added. Ample nearby parking is available. The property is positioned 25 miles south of San Jose with excellent freeway access and is under consideration as a future high-speed rail stop between San Francisco and Los Angeles. Seller financing is possible with attractive terms. The property offers upside potential for revitalization.
Key Highlights
- Seller financing available with attractive terms.
- Prime downtown location in a historic brick building**, formerly Gilroy's fire station.
- Equipped with a full commercial kitchen, two bars, two walk‑in refrigeration units, and three restrooms.**
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
$93,804
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
5.96%
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%
$1,876,080
$1.9M
Cap Rate 7%
$1,340,057
$1.3M
Cap Rate 9%
$1,042,267
$1.0M
Market Conditions
NOI Build-Up for 5,040 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
$133.1K $26.40/SF
− Vacancy
−$8.0K −$1.58/SF
EGI
$125.1K $24.82/SF
− OpEx
−$31.3K −$6.20/SF
NOI
$93.8K $18.61/SF
Area
Santa Clara County, CA
Vacancy
6.00%
Lease Rate
$26.40 /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%
$1,876,080
Cap Rate 7%
$1,340,057
Cap Rate 9%
$1,042,267
Alternative Uses
Best Use
Specialty Retail
$1.34M
$1.17M – $1.56M
NOI $93,804 @ 7.0% cap · market cap 5.96%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$3.04M
$2.66M – $3.55M
NOI $212,991 @ 7.0% cap · market cap 13.52%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,537
Businesses Nearby
21k
Monthly Visits Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Foot Traffic Nearby
Dining 84%
Shops & Services 12%
Home Improvements & Furnishings 3%
Jack in the Box
Dining
12,407 visits/mo
0.5 miles
Puerto Vallarta
Dining
4,961 visits/mo
0.4 miles
BMO Harris Bank
Shops & Services
1,851 visits/mo
0.4 miles
Napa Auto Parts
Shops & Services
697 visits/mo
0.4 miles
Ferguson
Home Improvements & Furnishings
661 visits/mo
0.5 miles
Demographics for 95020, CA
68,090
Population
20,679
Households
3.3
Avg Household Size
37
Median Age
28%
College-Educated
83%
High-School Grad
151.8 sq mi
ZIP Area
449
Density / Sq Mi
$134,242
Median Household Income
$50,421
Median Earnings
$2,256
Median Rent
$1,005,600
Median Home Value
Market
Vacancy Rate% for Retail in West region
Questions? Ask Rey
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Similar Off Market Nearby
- Elegant Events and Catering — 865 greenwich dr, gilroy, ca 95020
- Kneaded Bakery and Catering — 290 Ioof Ave, Gilroy, CA 95020
Frequently Asked Questions
What type of property is this?
Restaurant - Unique restaurant space in a historic brick building.
Where is this restaurant located?
The property is located at 55 5th Street Gilroy, CA.
What is the asking price?
The asking price for this property is $1,575,000.
What are key features of this property?
This property features: Seller financing available with attractive terms.; Prime downtown location in a historic brick building**, formerly Gilroy's fire station.; Equipped with a full commercial kitchen, two bars, two walk‑in refrigeration units, and three restrooms.**
