Sioux Falls Multifamily Investment
For Sale
Contact for pricing
809 South Sherman Avenue, Sioux Falls, SD 57104
Project-based Section 8 apartments near downtown Sioux Falls.
Property Size9,602 SF
Price / SF$94.77
Days on Market103
Property Features for 809 South Sherman Avenue
General Information
Standard status
Active
Size
9,602 SF
Property subtype
Multifamily
Building Details
Year Built
1977
Buildings
1
Units
14
Listing Agency:
Bender Commercial
(605) 681-8351
Listed By:
Alex Soundy · License #SD 18022
Source:
Crexi
Added: May 12
Changed: Aug 21
Last Checked: Aug 21 at 8:41AM
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 Bender Commercial
Investment Insights
Based on property information with market context.
This multifamily property consists of project-based Section 8 apartments. It is located just east of downtown Sioux Falls, near the intersection of 14th Street and Cliff Avenue, and in proximity to the Avera campus. The property has a HUD contract in place through April 2030. The property represents an opportunity for an investor to build an affordable multifamily portfolio. The property size is 9,602 square feet.
Key Highlights
- HUD contract in place through April 2030, providing stable income.
- Project‑based Section 8 apartments, ensuring consistent occupancy.
- Located near downtown Sioux Falls and Avera’s campus, offering convenient access to amenities and employment.
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
$76,879
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
8.45%
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%
$1,537,580
$1.5M
Cap Rate 7%
$1,098,271
$1.1M
Cap Rate 9%
$854,211
$854.2K
Market Conditions
NOI Build-Up for 9,602 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
$155.6K $16.20/SF
− Vacancy
−$15.8K −$1.64/SF
EGI
$139.8K $14.56/SF
− OpEx
−$62.9K −$6.55/SF
NOI
$76.9K $8.01/SF
Area
Sioux Falls, SD
Vacancy
10.14%
Lease Rate
$16.20 /SF/Yr
Expense Ratio
45.00%
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%
$1,537,580
Cap Rate 7%
$1,098,271
Cap Rate 9%
$854,211
Alternative Uses
Best Use
Apartment 5plus
$1.10M
$961.0K – $1.28M
NOI $76,879 @ 7.0% cap · market cap 8.45%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$2.61M
$2.28M – $3.04M
NOI $182,515 @ 7.0% cap · market cap 20.06%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Location Intelligence
Trade Area within ½ mile
1,608
Businesses Nearby
Explore this area
Business Placement
Demographics for 57104, SD
26,998
Population
13,952
Households
1.9
Avg Household Size
37
Median Age
25%
College-Educated
90%
High-School Grad
30.4 sq mi
ZIP Area
888
Density / Sq Mi
$59,161
Median Household Income
$39,101
Median Earnings
$849
Median Rent
$183,700
Median Home Value
Market
Vacancy Rate% for Multifamily in Midwest region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Apartment building - Project-based Section 8 apartments near downtown Sioux Falls.
Where is this apartment building located?
The property is located at 809 South Sherman Avenue Sioux Falls, SD.
What is the asking price?
The asking price for this property is $910,000.
What are key features of this property?
This property features: HUD contract in place through April 2030, providing stable income.; Project‑based Section 8 apartments, ensuring consistent occupancy.; Located near downtown Sioux Falls and Avera’s campus, offering convenient access to amenities and employment.
