Lenox Apartments
Invest in this 37,673 SF Lenox Apartments retail space for a strong 8.60% CAP.
Marketing description
Lenox Apartments is a 38-unit mixed-use elevator building at the corner of Atlantic and South Iowa Avenues in Atlantic City — immediately adjacent to the Tropicana Atlantic City, the largest resort and casino on the boardwalk. The property contains 32 residential units and 6 ground-floor retail storefronts across 37,673 SF on a 10,750 SF corner lot. Residential is 91% occupied, retail is 100% occupied, and the property generates ~$602,500 of in-place annualized rent.
Listed at $4,100,000 — a 9.55% going-in cap rate on stabilized pro forma NOI and an 8.60% cap on current as-is NOI. Three vacant residential units offer immediate lease-up upside; rent control leniency on new tenants and a heat-conversion opportunity provide additional NOI growth.
Investment highlights
- Adjacent to the Tropicana Atlantic City. The Tropicana is the largest resort and casino on the boardwalk: 2,364 hotel rooms, 3,000 slot machines, 30 restaurants, 30 shops, and two 2,500-space parking garages. The subject sits directly across the street, capturing foot traffic from the resort's daily room and visitor counts.
- Priced Below 2024 Appraised Value. $4,100,000 list price is 19% below the March 2024 third-party appraised value of $5,050,000. Going-in cap rate is 9.55% on stabilized pro forma and 8.60% on current as-is — both well above the appraiser's 8.00% cap and the 7.90% comp average.
- Stabilized Mixed-Use Income. 32 residential + 6 retail units. ~$602,500 of in-place annualized rent today; ~$662,500 stabilized at full occupancy. All retail leases run through 2027–2030 on modified gross terms.
- Lease-Up & Rent-Control Upside. Three vacant residential units offer ~$60,000 of immediate gross income. AC rent control caps existing tenancies but does not restrict new lease starts — turnover allows step-up to market over time.
- Operating-Expense Reduction Path. Heat is currently gas-fired and paid by ownership at ~$19,200/yr. Conversion to electric with sub-metering shifts the cost to tenants, materially boosting NOI.
- Recent Capital Improvements. Elevator inspected in 2024 with $50,000 of improvements completed. Major mechanical risk reduced for the next ownership.
- Future Telecom Revenue Share. Existing T-Mobile rooftop installation generates $0 of current rent to ownership (rights assigned to SBA in 2017). Owner retains the cell-tower real estate tax reimbursement (~$10,695/yr) and a 60% revenue share on any future telecom tenant SBA brings to the rooftop.
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