81 Center

Marcus & Millichap is pleased to exclusively list 81 Center, a 61,245-square-foot shopping center located at 1314 N Highway 81 in Duncan, Oklahoma. The property is situated inline on the main retail thoroughfare in Duncan, where traffic counts exceed 24,200 vehicles per day.

Producing a day one CAP rate of 9.18 percent, 81 Center presents an investor with a rare opportunity to acquire a stabilized asset well above the current national average CAP rate of 6.71 percent for retail properties (according to data provided by CoStar). 81 Center has 100 percent of its retail suites leased, and 95 percent of the retail tenants have occupied the center with ongoing tenure ranging from 8 to 16 years.

The rear portion of the property has 18,400-square-feet of warehouse space that is occupied by a tenant on a triple-net lease structured similarly to the triple-net retail tenants. This center also has 4,500-square-feet of unused space behind AT&T and Palm Beach Tan’s suites that could be converted to additional warehouse space and rented out to increase an investors cash flow.

An investor can increase the Year One CAP rate of 9.18 percent to achieve a 9.89 percent CAP rate in Year Five by maintaining occupancy and renewing leases at the scheduled renewal option rates and leasing the 4,500-square-feet of vacancy at an annual rate of $1.50 per square foot plus triple-net reimbursements. With debt sourced by Marcus & Millichap Capital Corporation, an investor could achieve a day one cash-on-cash return of 11.86 percent or higher. Another opportunity to increase returns with this property would be through refinancing when the Federal Reserve begins to cut interest rates in the next few years.