Northwest Gateway Office
For Sale
$3,200,000
975 34th Ave NW Unit 3 & 4, Rochester, MN 55901
Class A office space near Mayo Clinic.
Property Size15,021 SF
Days on Market296
Property Features for 975 34th Ave NW Unit 3 & 4
General Information
Standard status
Active
Size
15,021 SF
Class
B
Property subtype
Office
Building Details
Building Size
15,021 SF
Listing Agency:
North Rock Real Estate
Listed By:
Paul Aronhalt · License #40568111
(507) 516-7132
Source:
Northrockre
Added: Nov 23, 2025
Changed: Sep 8
Last Checked: Sep 14 at 6:02AM
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 North Rock Real Estate
Investment Insights
Based on property information with market context.
The investment offering includes the 3rd and 4th floor condominium units in the Northwest Gateway Office Building. The building is located at the primary west entrance to Rochester, Minnesota, at the intersection of US Highway 14 and West Circle Drive, minutes from the Mayo Clinic. The property has long-term leases to creditworthy professional tenants, providing a stable income stream. Its high-visibility location in Rochester’s expanding West Circle Drive corridor ensures strong tenant demand and consistent leasing performance. The property is positioned to benefit from Rochester’s economic growth, driven by the Mayo Clinic’s Bold Forward Unbound project, and is expected to see increased demand for Class A office space and long-term value appreciation. The Northwest Gateway Office Tower offers prominent signage opportunities and exceptional accessibility, making it a unique investment in a market with limited comparable assets. The property size is 15,021 square feet.
Key Highlights
- Long‑term leases to creditworthy tenants provide a stable income stream.
- High‑visibility location** at the intersection of US Highway 14 and West Circle Drive, near the Mayo Clinic.
- Positioned to benefit from Rochester’s economic growth and the Mayo Clinic’s Bold Forward Unbound project.
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
$276,799
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
8.65%
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%
$5,535,980
$5.5M
Cap Rate 7%
$3,954,271
$4.0M
Cap Rate 9%
$3,075,544
$3.1M
Market Conditions
NOI Build-Up for 15,021 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
$405.6K $27.00/SF
− Vacancy
−$36.5K −$2.43/SF
EGI
$369.1K $24.57/SF
− OpEx
−$92.3K −$6.14/SF
NOI
$276.8K $18.43/SF
Area
Rochester, MN
Vacancy
9.00%
Lease Rate
$27.00 /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%
$5,535,980
Cap Rate 7%
$3,954,271
Cap Rate 9%
$3,075,544
Alternative Uses
Best Use
Office B
$3.95M
$3.46M – $4.61M
NOI $276,799 @ 7.0% cap · market cap 8.65%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$5.79M
$5.06M – $6.75M
NOI $404,976 @ 7.0% cap · market cap 12.66%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
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Open Analytics
Current Use
Location Intelligence
Trade Area within ½ mile
361
Businesses Nearby
Explore this area
Business Placement
Demographics for 55901, MN
58,046
Population
24,852
Households
2.3
Avg Household Size
36
Median Age
50%
College-Educated
94%
High-School Grad
33.1 sq mi
ZIP Area
1,754
Density / Sq Mi
$90,430
Median Household Income
$52,778
Median Earnings
$1,321
Median Rent
$290,000
Median Home Value
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Cap Rate, Value Estimation, Potential NOI and more
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Market
Vacancy Rate% for Office in Midwest region
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Frequently Asked Questions
What type of property is this?
Office units - Class A office space near Mayo Clinic.
Where is this office units located?
The property is located at 975 34th Ave NW Unit 3 & 4 Rochester, MN.
What is the asking price?
The asking price for this property is $3,200,000.
What are key features of this property?
This property features: Long‑term leases to creditworthy tenants provide a stable income stream.; High‑visibility location** at the intersection of US Highway 14 and West Circle Drive, near the Mayo Clinic.; Positioned to benefit from Rochester’s economic growth and the Mayo Clinic’s Bold Forward Unbound project.
