Melrose Avenue Retail/Office
For Sale
$3,250,000
7661 Melrose Avenue, Los Angeles, CA 90046
Prime location with immediate cash flow and value-add potential.
Property Size7,316 SF
Price / SF$444.23
Days on Market148
Property Features for 7661 Melrose Avenue
General Information
Standard status
Active
Size
7,316 SF
Property subtype
Retail
Listing Agency:
(310) 650-7545
Listed By:
Ryan Gurman · License #01972081
(310) 650-7545
Source:
Cbre
Added: Mar 25
Changed: Jul 10
Last Checked: Aug 19 at 6:04AM
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 Ryan Gurman
Investment Insights
Based on property information with market context.
Located at 7661-7663 Melrose Avenue, this property offers an investment or owner-user opportunity. The property, totaling approximately 7,316 square feet, is situated near the intersection of Melrose and Fairfax, in a shopping district. The property provides immediate stability from a ground-floor tenant and value-add potential on the second floor. The ground floor features THEIA Mediterranean Restaurant & Bar, a newly renovated, long-term tenant providing immediate cash flow. The vacant second floor is suitable for an owner-user or a secondary lease. Secured on-site parking is available at the rear. The location benefits from high foot traffic near Fairfax High School, Blu Jam Cafe, and Urban Outfitters.
Key Highlights
- Prime location in a high‑foot‑traffic area near Melrose and Fairfax.
- Immediate cash flow from a newly renovated, long‑term anchor tenant (THEIA Mediterranean Restaurant & Bar).
- Significant value‑add potential with a vacant 2nd floor.
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
$169,784
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
5.22%
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%
$3,395,680
$3.4M
Cap Rate 7%
$2,425,486
$2.4M
Cap Rate 9%
$1,886,489
$1.9M
Market Conditions
NOI Build-Up for 7,316 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
$270.4K $36.96/SF
− Vacancy
−$27.9K −$3.81/SF
EGI
$242.5K $33.15/SF
− OpEx
−$72.8K −$9.95/SF
NOI
$169.8K $23.21/SF
Area
Los Angeles, CA
Vacancy
10.30%
Lease Rate
$36.96 /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%
$3,395,680
Cap Rate 7%
$2,425,486
Cap Rate 9%
$1,886,489
Alternative Uses
Best Use
Retail
$2.43M
$2.12M – $2.83M
NOI $169,784 @ 7.0% cap · market cap 5.22%
Second Best
—
—
no second resolved use
Theoretical Best
Multifamily LT 5
$148.22M
$129.69M – $172.92M
NOI $10,375,244 @ 7.0% cap · market cap 319.24%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
4,238
Businesses Nearby
Explore this area
Business Placement
Demographics for 90046, CA
49,987
Population
31,929
Households
1.6
Avg Household Size
39
Median Age
63%
College-Educated
95%
High-School Grad
5.7 sq mi
ZIP Area
8,770
Density / Sq Mi
$94,259
Median Household Income
$65,607
Median Earnings
$2,204
Median Rent
$1,411,500
Median Home Value
Market
Vacancy Rate% for Retail in Los Angeles, CA
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Retail space - Prime location with immediate cash flow and value-add potential.
Where is this retail space located?
The property is located at 7661 Melrose Avenue Los Angeles, CA.
What is the asking price?
The asking price for this property is $3,250,000.
What are key features of this property?
This property features: Prime location in a high‑foot‑traffic area near Melrose and Fairfax.; Immediate cash flow from a newly renovated, long‑term anchor tenant (THEIA Mediterranean Restaurant & Bar).; Significant value‑add potential with a vacant 2nd floor.
