Building Details

Building Size 1,550 SF

Listed By: Ari Chargo · License #License(s): MN: 40878014 Show Phone

Source: Marcusmillichap

Added: Apr 3 Changed: Sep 3 Last Checked: Sep 8 at 3:32AM

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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 Ari Chargo

Investment Insights

Based on property information with market context.

This portfolio comprises four Subway restaurants located in Byron, St. Charles, Stewartville, and Caledonia, Minnesota. Each location has been operational for over 20 years. All four leases have been extended for five years.

Key Highlights

• Portfolio of four Subway locations
• Subway has operated at each location for over 20 years
• All four leases just extended for five years

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

$18,720

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

5.72%

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%

$374,400 $374.4K

Cap Rate 7%

$267,429 $267.4K

Cap Rate 9%

$208,000 $208.0K

Market Conditions

NOI Build-Up for 1,550 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

$26.4K $17.04/SF

− Vacancy

−$1.5K −$0.94/SF

EGI

$25.0K $16.10/SF

− OpEx

−$6.2K −$4.03/SF

NOI

$18.7K $12.08/SF

Area

Olmsted County, MN

Vacancy

5.50%

Lease Rate

$17.04 /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%

$374,400

Cap Rate 7%

$267,429

Cap Rate 9%

$208,000

Alternative Uses

Best Use

Specialty Retail

$267.4K

$234.0K – $312.0K (±1% cap)

NOI $18,720 @ 7.0% cap · market cap 5.72%

Second Best

—

—

no second resolved use

Theoretical Best

Office A

$408.9K

$357.8K – $477.0K (±1% cap)

NOI $28,621 @ 7.0% cap · market cap 8.74%

Zoning and permitted uses should be independently verified with authorities.

Property Analytics

Property Profile

Current Use

Subway Take-out & Catering

Suggested Use

Top Pick Real Estate Agency Restaurant Pharmacy Storage Facility Grocery & Convenience Store Skin Care Clinic

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

158

Businesses Nearby

78k

Monthly Visits Nearby

Balanced

Demand for This Use

Explore this area Business Placement

Foot Traffic Nearby

Shops & Services 57% Dining 29% Groceries 14%

Kwik Trip Shops & Services

26,409 visits/mo 0.1 miles

McDonald's Dining

22,468 visits/mo 0.2 miles

Fareway Groceries

11,035 visits/mo 0.4 miles

Dollar General Shops & Services

6,480 visits/mo 0.2 miles

Dollar Tree Shops & Services

6,011 visits/mo 0.3 miles

Demographics for 55920, MN

8,512

Population

3,294

Households

2.6

Avg Household Size

37

Median Age

48%

College-Educated

99%

High-School Grad

68.7 sq mi

ZIP Area

124

Density / Sq Mi

$126,102

Median Household Income

$64,366

Median Earnings

$1,085

Median Rent

$356,900

Median Home Value

Market

Vacancy Rate% for Retail in Midwest region

8% 2020

7.3% 2021

6.5% 2022

6% 2023

5.7% 2024

6.3% 2025

Questions? Ask Rey

Realmo’s AI knows this listing — price, zoning, demand, history. Ask anything.

What type of property is this? Where is this conventional restaurants 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?

Conventional restaurant - Portfolio of four Subway restaurants in Minnesota.

Where is this conventional restaurant located?

The property is located at 821 Frontage Rd Byron, MN.

What is the asking price?

The asking price for this property is $327,300.

What are key features of this property?

This property features: Portfolio of four Subway locations; Subway has operated at each location for over 20 years; All four leases just extended for five years