401 N Phillips Ave: Sioux Falls Mixed-Use Property For Lease

401 N Phillips Ave is a mixed-use property for lease at 401 N Phillips Ave, Sioux Falls, SD, listed by Nelson Commercial Real Estate. This spotlight walks through everything a serious buyer or tenant should know before touring: what the property is, where it sits in the Sioux Falls market, how the numbers work, and the specific due-diligence items we would want answered before anyone signs.

Be part of the 6th Street transformation — your business on 6th & Phillips. 1st Floor: 7,500 SF and Garden Level: 7,500 SF available. At $14.50 – $23.50 / SF NNN and 15,000 SF, it occupies a specific niche in the Sioux Falls inventory — and the fit matters more than the headline number. Below we break the opportunity down the way we would walk a client through it in person.

The property at a glance

Be part of the 6th Street transformation! YOUR business…on 6th & Phillips!

The Andrew Kuehn Warehouse was built in 1903 with native Sioux Quartzite as a four story grocery warehouse building. The main floor of this mixed-use building is being renovated into exciting office options. One of the very last redevelopment opportunities on Phillips Ave.

$21 million Unity Bridge on 6th Street, Cherapa Place, Steel District, Levitt Bandshell, Startup Sioux Falls, Jones 421, Jacobson Plaza, Falls Park, and NOW the Andrew Kuehn Building. All of these exciting venues are within close proximity to 6th & Phillips.

Put plainly: this is 15,000 SF of mixed-use product in a market where comparable, ready-to-occupy options are limited. Sioux Falls has an encouraging track record of adaptive reuse. Buildings with strong bones, good parking, and central locations have repeatedly found second lives. Buyers and tenants who have been waiting for the "perfect" building usually discover that the cost of waiting — another year of rent, another year of construction inflation, another year of missed operating capacity — exceeds whatever they hoped to save by holding out.

Location: why Sioux Falls works for this asset

Sioux Falls is the economic engine of South Dakota and the largest metro between Minneapolis and Denver along the I-29 corridor. The metro has added population every year for more than three decades, and that steady in-migration is the single most reliable demand driver behind every commercial asset class in the market.

Healthcare (Sanford Health and Avera Health), financial services (Premier Bankcard, Citibank legacy operations, Wells Fargo), food processing, and a fast-growing distribution sector anchor the local employment base. South Dakota's lack of a state income tax and corporate income tax continues to pull regional headquarters and back-office operations into the metro.

Growth continues to push west and northwest toward Veterans Parkway, while the core reinvests through infill and adaptive reuse. That two-track pattern means well-located older product and raw ground on the growth edge both have credible paths to value.

Access matters as much as the address. Interstate 29 and Interstate 90 intersect at the northwest edge of the city, giving trucking and distribution users same-day reach to Omaha, Minneapolis, and Fargo. Local arterials — 41st Street, Louise Avenue, Minnesota Avenue, and Veterans Parkway — carry the retail traffic that most tenants underwrite against. For 401 N Phillips Ave, the practical question is how your customers, employees, and vendors will actually arrive — and whether the surrounding street network supports the trip counts your operation generates. We are happy to pull traffic data and drive-time rings for any prospective user.

Key features and building details

The listing highlights below come straight from the property file. They are the details that most often decide whether a building works for a given operation — and the ones we would confirm on site during a tour.

• 1st Floor: 7,500 SF
• Garden Level: 7,500 SF
• Space is able to be sub-divided
• Rates are dependent on location and configuration within the building

Each of those items has a dollar value attached. Mixed-use and special-purpose buildings should be underwritten twice: once as-is for a user who fits the existing configuration, and once as a conversion, with a real construction budget attached. The gap between those two numbers is your risk-adjusted range.

Property data

Here is the technical summary as recorded in the listing package. Zoning and size figures should always be verified against city records and a current survey before closing, but this is the working data set we underwrite from.

• Size: 1st Floor: 7,500 SF · Garden Level: 7,500 SF
• Rates: 1st Floor: $21.50 – $23.50 / SF NNN · Garden Level: $14.50 / SF NNN
• Estimated NNN costs: Taxes: $2.65 / SF · CAM: $4.22 / SF

Who this property fits

Adaptive-reuse developers, institutional and nonprofit users, church and school organizations, event operators, and creative owner-users who need a mix of assembly, office, and support space.

For a tenant, leasing here preserves capital for the business rather than tying it up in real estate. That is the right trade for operators who are still proving a concept, expanding quickly, or who simply generate a better return on capital inside their business than they would on a building. The trade-off is renewal exposure, which is why lease term, renewal options, and rent escalations deserve as much attention as the base rate.

For a franchise or multi-unit operator, this location should be measured against your site criteria the same way any other candidate would be — traffic counts, trade-area demographics, visibility, parking, and co-tenancy. If the site clears your model, the speed of getting open here is a real advantage over building new.

Making sense of the rate

The quoted rate is $14.50 – $23.50 / SF NNN for 15,000 SF. If the lease is structured NNN, remember that the quoted rate is only part of the picture: taxes, insurance, and common area maintenance are additional, and together they commonly add 25% to 40% to the all-in occupancy cost.

Build the full occupancy number before you compare options: base rent, estimated operating expenses, utilities, your buildout contribution net of any tenant improvement allowance, signage, and the cost of any downtime during construction. A slightly higher base rate with a meaningful TI allowance and free rent during buildout frequently beats a "cheaper" space that you have to finish yourself.

We also encourage clients to model the alternative. What does it cost to own instead? If your business plans to stay put for a decade, the buy-versus-lease comparison is worth running before you commit to a long term. Our brokers run that math for clients at no cost.

Zoning, entitlement, and site considerations

Code triggers are the wildcard. Changing an occupancy classification can trigger sprinkler, egress, accessibility, and parking requirements that were grandfathered under the prior use. We recommend a pre-application conversation with the Sioux Falls planning department early in the process. Fifteen minutes with a planner can save weeks — and it is the fastest way to learn whether your intended use is permitted by right, permitted with conditions, or requires a rezone.

Utilities, easements, and access deserve the same early attention. Confirm the location and capacity of water, sewer, gas, and three-phase power; identify any recorded easements that cross the site; and verify curb-cut and turning-movement approvals with the applicable street authority. On existing buildings, these items are the difference between a smooth closing and a stalled project.

Due diligence checklist

Here is the sequence we typically run with clients on a property like this. Most of it can be completed inside a standard 30- to 60-day inspection period.

1. 1.Tour the property with your broker and, where relevant, your contractor or architect on the first walk-through.
2. 2.Request the full listing package — survey, plat, title commitment, and any available environmental reports.
3. 3.Confirm zoning classification and that your intended use is permitted; identify any conditional use or variance requirements.
4. 4.Verify utility service locations and capacity, including electrical service size and whether three-phase power is available.
5. 5.Order a Phase I environmental site assessment, which most lenders will require regardless.
6. 6.Document the landlord's delivery condition in writing — what is being provided, what is your responsibility, and on what schedule.
7. 7.Model total occupancy or ownership cost, including taxes, insurance, maintenance, and capital reserves.
8. 8.Line up financing early and share the property package with your lender before you are under contract.
9. 9.Confirm signage rights, parking count and ratio, and any owners-association or covenant restrictions.
10. 10.Set a realistic timeline from agreement to occupancy, working backward from the date your business needs to be operating.

Our take

Every property has a right buyer and a wrong buyer. Our job isn't to sell you on 401 N Phillips Ave — it's to tell you honestly whether it fits what you're trying to do, and to show you the alternatives if it doesn't.

Nelson Commercial has worked the Sioux Falls region for more than four decades. That tenure means we have usually leased, sold, appraised, or toured the buildings around any given property, and we can tell you what actually traded versus what was listed. On 401 N Phillips Ave, we can share comparable transactions, current market rents, and a candid assessment of where the pricing sits relative to alternatives.

If this property is not the right fit, that is useful information too. We track off-market opportunities across Sioux Falls and the surrounding metro, and a large share of the deals we complete never appear on a public listing site. Tell us the operating requirements — square footage, loading, power, parking, budget, and timeline — and we will bring you the full set of options, on-market and off.

What the timeline looks like

From letter of intent to opening day, most lease transactions in this market run 60 to 120 days. Negotiating the LOI and lease document typically takes three to five weeks, permitting adds two to six depending on the scope of work, and construction depends entirely on how much of the space you are changing. If you have a hard opening date, work backward from it and build in a cushion.

The best way to compress that schedule is to bring your team in early. Loop in your lender, contractor, architect, and attorney during the first tour rather than after the paperwork starts. On 401 N Phillips Ave, we can provide the property package, comparable data, and a realistic schedule the same week you reach out — and if the timing does not work for this property, we will tell you that plainly and keep looking.