Freestanding Restaurant
For Sale
Contact for pricing
5604 Merchants Center Blvd, Knoxville, TN 37912
Freestanding restaurant building with walk-in cooler and freezer, plus 3-compartment sink and dining seating.
Property Size5,025 SF
Price / SF$298.51
Days on Market75
Property Features for 5604 Merchants Center Blvd
General Information
Standard status
Active
Size
5,025 SF
Property subtype
Retail
Site & Location
Traffic Count
17,743 vehicles/day
Highway Access
Yes
Additional Details
Furnished
Yes
Building Details
Buildings
1
Stories
1
Listing Agency:
Southland commercial Group
Listed By:
Raj Cheema · License #335652
(865) 466-7240
Source:
Crexi
Added: Jun 30
Changed: Sep 9
Last Checked: Sep 12 at 4:41AM
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 Southland commercial Group
Investment Insights
Based on property information with market context.
This freestanding restaurant building totals 5,025 square feet and is offered for sale as a ready-to-operate space. The property includes key commercial kitchen equipment such as a walk-in cooler, walk-in freezer, and a 3-compartment sink. Dining features include tables, booths, and chairs.
The building is located in a high-traffic commercial corridor off I-75 near Merchant Drive. Reported traffic counts include 86,026 vehicles per day on I-75 and 17,743 vehicles per day on Merchant Drive (TDOT).
The current offering is described as a former IHOP location and is positioned among hotels, retail shops, and other commercial businesses.
The building is located in a high-traffic commercial corridor off I-75 near Merchant Drive. Reported traffic counts include 86,026 vehicles per day on I-75 and 17,743 vehicles per day on Merchant Drive (TDOT).
The current offering is described as a former IHOP location and is positioned among hotels, retail shops, and other commercial businesses.
Key Highlights
- Freestanding restaurant building over 5,000 SF in the Merchant Drive commercial corridor just off I‑75
- Restaurant equipment included: walk‑in cooler, walk‑in freezer, and 3‑compartment sink
- Dining seating included with tables, booths, and chairs
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
$84,220
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
5.61%
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%
$1,684,400
$1.7M
Cap Rate 7%
$1,203,143
$1.2M
Cap Rate 9%
$935,778
$935.8K
Market Conditions
NOI Build-Up for 5,025 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
$117.6K $23.40/SF
− Vacancy
−$5.3K −$1.05/SF
EGI
$112.3K $22.35/SF
− OpEx
−$28.1K −$5.59/SF
NOI
$84.2K $16.76/SF
Area
Knoxville, 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%
$1,684,400
Cap Rate 7%
$1,203,143
Cap Rate 9%
$935,778
Alternative Uses
Best Use
Specialty Retail
$1.20M
$1.05M – $1.40M
NOI $84,220 @ 7.0% cap · market cap 5.61%
Second Best
Industrial
$481.8K
$421.6K – $562.1K
NOI $33,726 @ 7.0% cap · market cap 2.25%
Theoretical Best
Office A
$1.24M
$1.09M – $1.45M
NOI $87,121 @ 7.0% cap · market cap 5.81%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
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Open Analytics
Current Use
Lease Details
17,743 VPD
Traffic count
Yes
Highway access
Location Intelligence
Trade Area within ½ mile
533
Businesses Nearby
Under-served
Demand for This Use
Explore this area
Business Placement
Demographics for 37912, TN
22,313
Population
10,916
Households
2
Avg Household Size
36
Median Age
23%
College-Educated
88%
High-School Grad
10.6 sq mi
ZIP Area
2,105
Density / Sq Mi
$44,754
Median Household Income
$30,859
Median Earnings
$1,050
Median Rent
$185,600
Median Home Value
Check the figures for this property
Cap Rate, Value Estimation, Potential NOI and more
View Realmo Analytics
Market
Vacancy Rate% for Retail in Knoxville, TN
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Conventional restaurant - Freestanding restaurant building with walk-in cooler and freezer, plus 3-compartment sink and dining seating.
Where is this conventional restaurant located?
The property is located at 5604 Merchants Center Blvd Knoxville, TN.
What is the asking price?
The asking price for this property is $1,500,000.
What are key features of this property?
This property features: Freestanding restaurant building over 5,000 SF in the Merchant Drive commercial corridor just off I‑75; Restaurant equipment included: walk‑in cooler, walk‑in freezer, and 3‑compartment sink; Dining seating included with tables, booths, and chairs
