505 E 7th ST
Austin, TX, 78701
$3,295,000
Beds
0 Baths
6,334 SqFt
0.14 Acres
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

Property Details

Price:
$3,295,000
MLS #:
5799562
Status:
Active
Beds:
0
Baths:
0
Address:
505 E 7th ST
Type:
Commercial
Subtype:
Business
Subdivision:
Block 065 Original City
City:
Austin
Listed Date:
Mar 30, 2024
State:
TX
Finished Sq Ft:
6,334
ZIP:
78701
Lot Size:
5,889 sqft / 0.14 acres (approx)
Year Built:
1961
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Concrete
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Central

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Financial

Buyer Agent Compensation
3.000%
Taxes
$19,538

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505 E 7th ST
Austin, TX