Building Details

Building Size 20,000 SF

Listing Agency: Mendo Sotheby's International Realty

Listed By: Greg Burke · License #01206312 Show Phone

Source: Elliman

Added: Mar 11 Changed: Sep 22 Last Checked: Sep 22 at 5:01PM

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Investment Insights

Based on property information with market context.

The Sacred Rock Inn is situated on the Mendocino Coast, offering 19 seaside accommodations across 5 parcels on 2.5 acres. The property includes an eclectic collection of buildings, featuring 2 private residences, 2 separate restaurants, a lobby/reception area with an office and gift shop, and a detached conservatory currently configured for yoga and spa treatments. An extensive 'back of the house' network addresses housekeeping, maintenance, and storage needs. There is also a separate lot available for employee, event, and overflow parking. The grounds of the property can accommodate larger gatherings for weddings and corporate retreats. The inn features a mix of cottages, two-story bungalows, and inn units with ocean views and private decks. The inn is a fully-restored Victorian/Craftsman property located in Elk, recognized as a destination for food and wine enthusiasts. The surrounding area features rocky promontories and redwoods along the coast. Coastal Mendocino is known for its year-round tourism, events, and wellness offerings. The property includes extensive landscaping with pathways and terraced decking along the bluff top. The property has been updated and maintained, ensuring limited near-term capital improvements.

Key Highlights

• 19 luxurious seaside accommodations on 2.5+- acres with ocean views and private decks.
• Two on‑site restaurants: an upscale dining room and a gastropub.
• Located in Elk, named the best small town in America for foodies and wine lovers, home to a two‑Michelin‑starred restaurant.

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

$500,526

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%

$10,010,520 $10.0M

Cap Rate 7%

$7,150,371 $7.2M

Cap Rate 9%

$5,561,400 $5.6M

Market Conditions

NOI Build-Up for 20,000 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

$744.0K $37.20/SF

− Vacancy

−$76.6K −$3.83/SF

EGI

$667.4K $33.37/SF

− OpEx

−$166.8K −$8.34/SF

NOI

$500.5K $25.03/SF

Area

Mendocino County, CA

Vacancy

10.30%

Lease Rate

$37.20 /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%

$10,010,520

Cap Rate 7%

$7,150,371

Cap Rate 9%

$5,561,400

Alternative Uses

Best Use

Specialty Retail

$7.15M

$6.26M – $8.34M (±1% cap)

NOI $500,526 @ 7.0% cap · market cap 4.00%

Second Best

Hotel Hospitality

$1.83M

$1.60M – $2.14M (±1% cap)

NOI $128,250 @ 7.0% cap · market cap 1.03%

Theoretical Best

Flex RnD

$7.48M

$6.54M – $8.72M (±1% cap)

NOI $523,411 @ 7.0% cap · market cap 4.19%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

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Current Use

Bed & breakfasts

Suggested Use

Top Pick Auto Repair Shop Cafe & Coffee Shop Hair Salon Nail Salon Daycare Center Real Estate Agency

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

49

Businesses Nearby

Well-served

Demand for This Use

Explore this area Business Placement

Demographics for 95432, CA

443

Population

441

Households

1

Avg Household Size

49

Median Age

50%

College-Educated

98%

High-School Grad

72.0 sq mi

ZIP Area

6

Density / Sq Mi

$17,708

Median Earnings

$728,100

Median Home Value

Market

Vacancy Rate% for Retail in West region

7% 2020

6.3% 2021

5.5% 2022

5.3% 2023

5.5% 2024

5.8% 2025

Questions? Ask Rey

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What type of property is this? Where is this bed & breakfasts located? What is the asking price? Find similar properties What are key features of this property?

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Frequently Asked Questions

What type of property is this?

Bed & breakfast - Luxurious 19-unit inn on 2.5 acres with restaurants.

Where is this bed & breakfast located?

The property is located at 5920 Highway 1 Elk, CA.

What is the asking price?

The asking price for this property is $12,500,000.

What are key features of this property?

This property features: 19 luxurious seaside accommodations on 2.5+- acres with ocean views and private decks.; Two on‑site restaurants: an upscale dining room and a gastropub.; Located in Elk, named the best small town in America for foodies and wine lovers, home to a two‑Michelin‑starred restaurant.