Taft Highway Retail Center
Taft Highway Retail Center in Signal Mountain, Tennessee, offered at $1,646,000 at a 7.04% cap rate ($115,224 NOI). This 100% occupied, two-tenant strip center is anchored by Dollar General, which occupies 88% of the 14,053 SF building and carries an investment-grade BBB/Baa3 credit rating. The Dollar General location ranks 19th among 916 Tennessee stores, drawing over 233,000 annual visitors and generating gross revenues exceeding $4 million across its 22-year operational history at this site.
Situated on 1.25 acres with direct frontage on Taft Highway (US-12), Signal Mountain's primary commercial corridor, the property benefits from significant market barriers to entry. Signal Mountain is an affluent, growth-resistant suburb with a median household income of $141,008 and median home values of $544,300; national brands like Walmart have historically been denied entry, creating scarcity value for existing retail. The asset is offered at a substantial discount to the estimated $2,882,000 replacement cost.
The Dollar General lease (Modified NNN, through March 2030) provides $7,051 monthly base rent at $6.90 per SF annually, with two five-year renewal options featuring 10% step-ups (to $7,756.14 and $8,531.75 monthly, respectively, through March 2040). The secondary tenant, Mind & Muscle fitness (1,785 SF), commenced July 2026 on a five-year gross lease with 2% annual escalations and a five-year market-rate renewal option. Taxes and insurance are 100% tenant-reimbursed. Recent 2026 capital improvements totaling approximately $110,000 included the complete buildout of the fitness space, comprehensive water mitigation systems, and structural upgrades.
By 2030, projected revenues reach $127,588 annually, valuing the asset at $1,822,688 at a 7% cap rate. By 2035, revenues are estimated at $142,581, supporting a capital value of $2,036,871. Replacement cost is projected to exceed $4.23 million by 2040. Tennessee's zero state income tax further enhances the after-tax return profile.
- Dollar General anchor: investment-grade tenant (BBB/Baa3), 22-year operational history, ranked 19th of 916 Tennessee locations
- 100% occupancy with dual-tenant diversification; Dollar General lease through 2040 with two 10% step-up renewal options
- Direct Taft Highway frontage in affluent, growth-resistant market; national brands historically denied entry
- Significant discount to $2.88M replacement cost; projected to $4.23M by 2040
- Tennessee zero state income tax; all taxes and insurance tenant-reimbursed
- Recent $110K capital improvements completed; fitness tenant lease commenced July 2026
More property details
About this property
Prime retail asset situated directly along Taft Highway (US-12), the core commercial corridor of Signal Mountain. Signal Mountain is an affluent, highly growth-resistant suburb with median household income of $141,008 and median home values of $544,300. National brands like Walmart have historically been denied entry.
- Direct frontage on Taft Highway (US-12);
- affluent local demographics;
- high barriers to entry;
- zero state income tax in Tennessee
Features & amenities
Location
Additional details
Signal Mountain is growth-resistant; national brands like Walmart historically denied entry
100% property taxes and insurance reimbursement; CAM maintenance; minor repairs under $1,000; HVAC preventive maintenance contract
Structural repairs; roof repairs/replacements; plumbing/electrical/HVAC repairs over $1,000; parking lot repairs/replacements
Repairs/replacements of improvements in premises except HVAC (initial term); assumes HVAC responsibility in extended term; utilities
- Complete commercial buildout for Mind & Muscle fitness space
- Comprehensive water mitigation: French drains, rear commercial sump pump lines, battery backups
- Masonry protection: 18-foot block wall section at rear for storm water run-off
- Sanitary sewer system cleared and fully updated
- Exterior structural upgrades, gutter tune-ups, selective tree clearing