Active

505 E 7th ST

Austin TX, 78701

$2,695,000


$425.48 per sqft

Active

6,334 sqft

Commercial

Built in 1961

NOI of $443,380 and 13.46% cap rate is pro forma based on Jan 1st, 2031 starting lease term at $70/ft after the current lease expires in Dec 2030. This is an incredible opportunity to acquire a property in CBD, Austin, TX. This 6334 sq foot property is currently home to the Kingdom Nightclub. The current lease is Very low under market as it was done during the Covid pandemic, with a current lease at $40,236 base yearly rent NNN with 4% annual increases until Dec 31st, 2030. Market rents for this asset are at $70 per foot which would be close to a 13.5% cap rate at the current asking price.

While current rents are low, for 6.5 more years, the property is priced at an incredible $520/sq.foot for the building and $556.20/ sq ft for the land. Market Land Value in this area is in the $5K to $10K per foot so this property is priced down by a factor of 10 based on the market land value. The average price per foot for improvements in the area is $1500 to $2500 per foot. The property has incredible future cash flow and redevelopment potential. Acquiring a property in Austin CBD a this price level is extremely rare and this is a tremendous opportunity for an end user or developer. one block away, the historic 6th St. revitalization project is underway.


Conclusion: The property is not suitable for an owner-occupant as the current low lease term does not expire until Dec 2030. However, the property is listed at a steep discount by a factor of 10+, this property is the best investment option in Austin if you are willing to wait for the investment to mature by 203 once the low lease expires. With the 6th St. revitalization project on the way, 6 years from now this property will be worth even more.
While current rents are low, the property is priced at an incredible $520/sq.foot which is well below the average for the area. The property has incredible future cash flow and redevelopment potential. Acquiring a property in Austin CBD a this price level is extremely rare

5799562

MLS ID

March 29, 2024

Listed

May 12, 2024

Updated

Map

505 E 7th ST
Austin TX, 78701

Interior Features

Total Stories

2


Floor Description

Concrete


Fireplace

No


Cooling

Yes


Cooling Description

Central Air


Heating

Yes


Heating Description

Central

Exterior/Building Features

Lot Size

0.14 Acres


Sewer

Public Sewer

Other Property Details

Area Name

DT


Taxes

$19,538


Tax Frequency

Annually


Garage

No


Parking

None


View

No


County

Travis


Water Source

Public


Pool

No


Buyer Agency Compensation

3%

Courtesy of Resavvy LLC

Listing Contact: (512) 762-8669

Disclaimer: All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change, or withdrawal. Neither listing broker(s) nor The Palazo Group shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. The data relating to real estate for sale on this website comes in part from the Austin/Central Texas Realty Information Service.

Listings courtesy of ACTRIS as distributed by MLS GRID. Based on information submitted to the MLS GRID as of ©2024 (date and time MLS GRID Data was obtained). All data is obtained from various sources and may not have been verified by broker or MLS GRID. Supplied Open House Information is subject to change without notice. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information

©2024 Austin/Central Texas Realty Information Service. All rights reserved. 

Database last updated 12:07 PM UTC, 5/12/2024

 

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