- Starbucks continues to see most investor demand with other active brands including 7 Brew, Caribou Coffee, Dunkin’, Dutch Bros Coffee and Scooters Coffee House
- SRS has 45 coffee store properties currently on the market or in escrow
SRS Real Estate Partners Capital Markets is pleased to announce that over the past 18 months, the firm has sold a total of 50 drive-thru properties occupied by coffee shops including Starbucks, 7 Brew, Caribou Coffee, Dunkin’, Dutch Bros Coffee and Scooters Coffee House. All told, the transactions are valued at $135 million and have an average closing cap rate of 5.52%. Additionally, SRS has a total of 45 active coffee shop listings or in escrow with a total value of $124 million.
“While the investor favorite from a brand and credit perspective remains Starbucks, developers and property owners now have a much wider and growing pool of coffee users to consider when offering a coffee shop amenity to their property,” said Patrick Luther, Principal & Managing Director with SRS. “Investors have been clamoring for these cash-flowing, low maintenance single-tenant assets especially with brands that are aggressively expanding and seeking more U.S. locations to capture a growing market share.”
The majority of SRS’ recently completed deals and those that are in escrow are new construction assets with fee simple ownership, ground lease (land ownership), and sale-leaseback scenarios. Due to the nature of the asset, they are overwhelmingly located in busy retail corridors and are usually a part of a larger retail center, creating strong crossover traffic and a dense customer population consisting of both employees and residents. All this bodes well for the stability of the asset and justifies scheduled rental increases that are built into the lease agreements.
“Expanding coffee occupiers are savvy when it comes to site selection and navigating their way through a transaction. They know the value of their credit and how to structure a deal where they are able to get the maximum capital contribution from the owner while minimizing their occupancy cost. We have seen a significant escalation of competition from coffee and beverage focused tenants for new sites since the pandemic,” added tenant representation specialist Tyler Grisham, a Senior Vice President & Managing Principal with SRS.
Grisham observed, “Dutch Bros Coffee, Caribou Coffee, Swig, Black Rock, HTeaO, and 7 Brew, among others have announced their goals to add new stores in new markets across the nation in the near future. Larger food operators like McDonald’s are starting to enter the segment with their CosMc’s concept and there are whispers of 7-Eleven experimenting with a coffee concept as well.”
Year to date, SRS Capital Markets has completed approximately $991 million in deal volume comprised of 235 transactions in 45 states. SRS currently has in excess of 659 properties actively on the market with a market value surpassing $3.2 billion.
About SRS Real Estate Partners
Founded in 1986, SRS Real Estate Partners is building upon its retail foundation to provide extensive commercial real estate solutions to tenants, owners, and investors. Headquartered in Dallas, with 29 offices in the U.S., SRS has grown into one of the industry’s most influential and respected leaders. Our commitment to excellence is strengthened by our Guarantee of Value and our success is measured in the achievement of our clients’ objectives, satisfaction, and trust. For more information, please visit srsre.com.