140 Litton Dr

Coldwell Banker Commercial Grass Roots Realty, as Exclusive Advisor, is pleased to present for sale 140 Litton Drive in Grass Valley, California (“The Property”), a meticulously maintained 20,860 SF medical and office building ideally located on Sierra College Drive, the most desirable medical and office submarket in western Nevada County. This offering represents a fantastic opportunity to acquire a best-in-class asset at a price significantly below replacement cost, with stable cash flow and immediate value-add potential through more efficient expense management and longer-term value creation by converting traditional office space to medical office as leases roll.

The property is being offered at $4,850,000 ($232.49/SF) with a year 1 cap rate of 6.82%. It is currently 95.4% leased across 10 suites, averaging 2,086 SF—a sweet spot for both medical and traditional office tenants. The weighted average rental rate of $1.58/SF/MO NNN is significantly below market comparables, with recent medical lease comps in neighboring buildings averaging $2.19/SF/MO NNN and traditional office leases averaging $1.84/SF/MO NNN, offering a clear value-add opportunity as tenants roll.

In addition, the current owner has not fully passed through all the expenses allowed by the existing leases, offering an investor immediate potential to increase NOI through more efficient expense management.

With a weighted average lease term (WALT) of 3.24 years, investors will enjoy both immediate cash flow stability and the ability to capture future upside through both marking rents to market and strategic conversions to medical office, which commands significantly higher rents than traditional office space.

Investment Highlights:

Ideal Location / High Quality Tenants:

Sierra College Drive is home to the newest medical and office buildings in Grass Valley and is the premier location for physicians due to the superior quality of the buildings and their close proximity to Sierra Nevada Memorial Hospital, just a two-minute drive from 140 Litton Drive. This proximity allows medical practitioners almost zero windshield time when traveling between their offices and the hospital, making it the clear choice for healthcare providers seeking both quality and efficiency.

While Sierra College Drive is predominantly known for housing the majority of the medical users in the market, it also attracts the region’s highest-quality traditional office users. Notable tenants include CHW Law, The Scinto Group (CPA), Baird Financial, Ostrofe Financial Consultants, Stifel, Sierra Nevada Memorial Hospital Foundation, and Placer Title, all of which call Sierra College Drive home.
In addition to its strategic location near the hospital, 140 Litton Drive offers a variety of nearby amenities. The popular BriarPatch Food Co-op is located directly across the street, and the property is within walking distance to retail and restaurant options on East Main Street, Nevada Union High School, and Sierra College. Just a block away is the trailhead for Litton Trail, a 2-mile natural foot and bike path that winds through an informal urban greenbelt, connecting residents and workers to businesses, schools, and other institutions.

Submarket Fundamentals

Sierra College Dr. is best performing office submarket in western Nevada County and currently has 4 vacancies (one of which is a 960 SF turn-key medical suite available at 140 Litton) totaling 5,290 Sf across a total inventory of 212,813 SF of office/medical office space, representing a 2.4% vacancy factor. High construction costs, estimated at approximately $350/SF, and the limited availability of developable land near the hospital make it unlikely that new competing buildings will be developed without significant rent growth. The scarcity of high-quality office and medical space should provide consistent demand and strong rent growth well into the future.

Pride of Ownership/Meticulously maintained

Current ownership has maintained The Property at the highest standard with the roof, parking lot, HVAC and interior spaces all in excellent condition.
Below Market Rents:

140 Litton’s weighted average rental rate of $1.58/SF is 14% below traditional office comparables on Sierra College Dr. which average $1.84/SF and 28% below recent medical lease comps which average $2.19/SF providing ample opportunity to push rents as tenants expire, with or without implementing a medical conversion strategy.

Expense Passthroughs:

Currently, 76% of the rent roll (all but two leases) are on NNN leases, while the other two tenants (SCO Engineering and Sierra Nevada Memorial Hospital Foundation) reimburse for CAMs but not cover taxes and insurance. The NNN tenants are currently reimbursing $0.42/SF/MO, compared to actual operating expenses of $0.67/SF/MO, which presents an immediate value-add opportunity for a new owner to pass through a greater portion—or all—of the operating expenses.

Our pro forma analysis assumes a conservative approach to increasing tenant NNN reimbursement charges, projecting reimbursement revenue of approximately $102,000 in year 1, or $0.43/SF/MO across the occupied square footage—covering around 69% of year 1 operating expenses. This figure is projected to increase modestly over time, reaching 90% of total operating expenses in the final two years of the analysis period. This conservative approach allows a new owner flexibility in deciding how quickly to implement full expense pass-throughs.

It’s important to note that current operating expenses for neighboring buildings average between $0.45 and $0.65/SF/MO, reinforcing the opportunity to bring 140 Litton Drive more in line with local market standards.

Medical Build-Out Infrastructure:

Approximately 34% of the building is currently built out as medical office space, with an additional 2,880 SF (Suite 110 – 13.4% of The Property) presently used as traditional office but already built out as medical space with plumbed treatment rooms (plumbing is currently capped in the walls). This existing infrastructure significantly reduces the cost and effort of converting the space to medical use, providing an immediate advantage for potential medical tenants or investors seeking to reposition the property for higher rent opportunities in the medical office market.