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    Restaurant Investment Property For Sale Title is generated by Realmo AI

    2316 E 3rd St, Chattanooga, TN 37404

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    Restaurant in Chattanooga's medical community with development potential.

    Type:Retail
    Property size:
    1,337 SF
    Price / SF:
    $486/SF
    Added:
    Oct 3, 2024
    Days on Market:
    611
    Last Refresh:
    May 12 at 10:59 pm

    Property Features for 2316 E 3rd St

    General Information

    Standard status
    Active
    Size
    1,337 SF
    Property subtype
    Retail

    Building Details

    Year Built
    1965

    We can help!

    Listing Contact
    Jason Lehn
    Jason Lehn

    Listing agent Jason Lehn License #TN 323440

    Listing office Herman Walldorf Commercial, Inc.

    Listing date Oct 3, 2024

    Source Crexi

    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 Herman Walldorf Commercial, Inc.

    HighLights

    • Brand‑new 10‑year Triple Net (NNN) lease with 10% rental increases every five years.
    • Opportunity for additional development on excess land.
    • Located in the heart of Chattanooga's medical community with a large daytime population.
    • Well‑established quick service restaurant (American Wings) with a diverse menu.
    • Secure investment with a hands‑on owner operating since 2016.
    • Lease terms offer two 5‑year renewal periods.

    Overview

    Located in the Glenwood neighborhood of Chattanooga, Tennessee, this investment property offers long term stable income and excess land which provides opportunity for additional development. The property is situated in the heart of Chattanooga’s medical community, anchored by CHI Memorial Hospital and Parkridge Medical Center, featuring multi-tenant medical office buildings and freestanding clinics, in addition to community centers, non-profit organizations, and schools. This location benefits from a large daytime population, providing a steady flow of patrons from area residents and the commercial sector. The property is occupied by American Wings, a quick service restaurant featuring a menu of chicken wings and tenders, Philly sandwiches and subs, fried fish and shrimp, fried rice, and fries and onion rings. The restaurant has been operating at this location since 2016. The investment includes a new 10-year Triple Net (NNN) lease with rental increases of 10% every five years, including option periods. The lease terms offer two renewal periods of five years each, potentially extending the lease term to 20 years. The property size is 1337 square feet. The northeast corner of the property could be further developed for additional parking or for a small footprint drive thru operation or food truck.
    Property Profile Location Intelligence

    Current Use by Public Records

    American Wings Restaurant

    Suggested Use

    Real Estate Agency Law Firm Restaurant Dental Office Hair Salon Nail Salon Building Supply Gym & Fitness Center Auto Repair Shop Skin Care Clinic

    Zoning and permitted uses should be independently verified with local authorities.

    Location Insight

    • Map
    • Local Demand
    City
    Chattanooga
    County
    Hamilton
    State
    Tennessee
    Longitude
    -85.265944
    Latitude
    35.0384029

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    FAQs

    What type of property is this?
    Conventional restaurant - Restaurant in Chattanooga's medical community with development potential.
    Where is this conventional restaurant located?
    The property is located at 2316 E 3rd St Chattanooga, TN.
    What is the asking price?
    The asking price for this property is $650,000.
    What are key features of this property?
    This property features: Brand‑new 10‑year Triple Net (NNN) lease with 10% rental increases every five years.; Opportunity for additional development on excess land.; Located in the heart of Chattanooga's medical community with a large daytime population.
    (423) 756-2400 Call to check price and availability
    We can help!
    Contact for Pricing
    Please call us for current price
    and status of this listing Jason Lehn
    Jason Lehn
    Real Estate License ID: TN 323440
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    Realmo Value Estimations

    Realmo estimates a property’s market value using a proprietary methodology that incorporates public data and user-submitted information. This cumulative value is generated by integrating a variety of conventional and innovative methods. 

    Disclaimer

    These figures are not official appraisals and should not be used as a substitute for a valuation performed by a licensed appraiser.
    Actual market value may differ due to factors not captured in the data. Estimates are offered for informational purposes only, and users should conduct independent research before making financial or investment decisions.
    By using this feature, you acknowledge that Realmo is not responsible for actions taken based on these estimates.

    AI approach

    Realmo AI Method estimates property value using machine learning models trained on millions of comparable listings, transactions, and market signals. It analyzes property features, location intelligence data, and current market dynamics to predict the most probable market value in real time.

    Realmo CapRate Calculation

    Realmo calculates the Capitalization Rate (Cap Rate) to help estimate a property's potential return on investment. The Cap Rate is a fundamental metric in commercial real estate that measures the relationship between a property's net operating income and its market value.

    How We Calculate Cap Rate

    Cap Rate Formula:
    Cap Rate (%) = (Net Operating Income / Property Value) × 100

    Net Operating Income (NOI) Formula:
    NOI = Area × Lease Rate × (1 - Vacancy Rate) × (1 - Operating Expense Ratio)

    Components

    Net Operating Income (NOI) represents the annual income a property generates after operating expenses:

    • Area: Building square footage from property records
    • Lease Rate: Annual $/sqft based on market data for the property type and geographic location
    • Vacancy Rate: Percentage of unoccupied space based on market data for the property type and location
    • Operating Expense Ratio: Operating costs as a percentage of income, varies by property type

    Property Value is derived from:

    • Recent sale price (if available)
    • Statistical models using comparable sales
    • AI-powered valuation estimates

    Example Calculation

    For a 100,000 sqft Office Building:

    • Lease Rate: $25.00/sqft/year (market data for Office in this area)
    • Vacancy Rate: 8% (market data for Office in this area)
    • Operating Expense Ratio: 35% (typical for Office properties)
    • Property Value: $15,000,000

    Step 1: Calculate NOI

    NOI = 100,000 × $25.00 × (1 - 0.08) × (1 - 0.35)
    NOI = 100,000 × $25.00 × 0.92 × 0.65
    NOI = $1,495,000/year

    Step 2: Calculate Cap Rate

    Cap Rate = ($1,495,000 / $15,000,000) × 100
    Cap Rate = 9.97%

    Property Type Considerations

    Net Operating Income calculations vary by property type due to different operating expense ratios:

    • Office: Higher expenses (30-40%) for HVAC, utilities, maintenance
    • Retail: Moderate expenses (25-35%) for common area maintenance
    • Industrial/Warehouse: Lower expenses (15-25%) for minimal tenant services
    • Multifamily: Moderate expenses (35-45%) including property management
    • Self-Storage: Lower expenses (25-35%) due to minimal maintenance

    Market lease rates and vacancy rates are specific to each property type and geographic location, reflecting local market conditions.

    Disclaimer

    These calculations are estimates for informational purposes only and should not be used as a substitute for professional financial analysis or appraisal.

    • Cap Rate calculations depend on market data that may change over time
    • Actual operating expenses, lease rates, and vacancy rates may differ from market averages
    • Individual property conditions, lease terms, and tenant quality significantly impact actual NOI
    • Property value estimates are approximations and not official appraisals
    • Cap rates vary widely by market, property condition, and investment risk profile

    Professional Guidance Recommended: Before making any investment or financial decisions, consult with licensed appraisers, commercial real estate brokers, and financial advisors who can evaluate your specific property and circumstances.
    By using this feature, you acknowledge that Realmo is not responsible for investment decisions or actions taken based on these estimates.

    Cap approach

    Capitalization Method calculates value based on estimated net operating income (NOI) and applying a market-based capitalization rate (cap rate), we estimate what a typical investor might be willing to pay for it.

    Comparable approach

    Comparable estimate is based on recent sales of similar nearby properties, adjusted for factors like size, condition, and location.

    Relative

    Relative property class coefficient uses factors that account for typical price differences between various asset types (e.g., retail vs. industrial) to provide a more accurate market-aligned estimate.

    Geo

    Comparable Sales Method, enhanced by Geo coefficients — location-based adjustment factors that reflect differences in price levels across neighborhoods, cities, or regions ensuring a more accurate, market-sensitive valuation.

    Stat Estimate

    This method estimates value based on actual market adjusted recent (~5 years) sales of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all similar sales ($/sqft) are above this value
    • Range-to: 75% of all similar sales ($/sqft) are below this value
    AI Estimate

    This method estimates value based on AI market estimation of comparable properties around by location and property type.

    • Ranges - area data calculated by industry standard IQR Outlier Removal Method
    • Range-from: 75% of all estimations ($/sqft) are above this value
    • Range-to: 75% of all estimations ($/sqft) are below this value
    Alternative use

    Estimate considers the property’s potential value if used for a different purpose-based on zoning, demand, and market feasibility.

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