January 22, 2019 – SRS Real Estate Partners’ National Net Lease Group has completed the $3.45 million ground lease (land ownership) sale of a single-tenant restaurant property fully occupied by Red Robin just 1.2 miles from Disneyland. Situated at 12007 Harbor Blvd. in Garden Grove, the asset totals 7,346 square feet and is on a corporate-guaranteed triple-net lease with Red Robin Gourmet Burgers, Inc.
SRS’ National Net Lease Group Managing Principals Matthew Mousavi and Patrick Luther represented the seller, a Los Angeles-based partnership. SRS Senior Vice President Michael Walseth represented the all-cash buyer, a Los Angeles-based, private non-1031 investor.
“This Red Robin offered the buyer zero landlord responsibilities and a very high profile Orange County location near the Disneyland Resort and the Anaheim Convention Center, dozens of hotels, and is just one block from The Great Wolf Lodge,” said Mousavi. “Single tenant assets in high barriers to entry markets such as this one are scarce. We were able to put this deal together without having to go to market, and achieved low 4 percent cap rate pricing for this parcel which featured a short-term lease and substantial upside potential.”
Luther added, “Our SRS National Net Lease Group is also marketing three additional single-tenant pads within this retail center valued at approximately $17 million, via a break-up strategy. Of the three remaining parcels, we have offers on all assets and expect to exit the project within our expected timeframes, meeting the seller’s objectives, and resulting in low 4 percent cap rate pricing.”
“This purchase marks my fifth off-market acquisition with this buyer to deliver on this investor’s objective of accumulating a sizable portfolio of NNN properties that are leased to best-in-class tenants in prime locations throughout Orange County,” comments Walseth. “The buyer was drawn to the corporate credit of the tenant, short term nature of the lease, low cost per foot, replaceable rent, and strong restaurant sales at the location.”
Walseth added, “In order to successfully acquire properties in Orange County and other hot markets, you have to be reasonably aggressive in your approach. There are certain tactics that provide the seller the confidence of a successful closing, yet give the buyer time to check all the necessary due diligence boxes. It pays to use creativity in deal-making when competing against other strong buyers.”
The asset is also across the street from a Target-anchored retail center is and near the Outlets at Orange with tenants that include Nike Factory Store, Levi’s Outlet, and Nordstrom Rack, among others. More than 866,000 residents and 400,000 employees support the local trade area within a five-mile radius of the property not to mention the hundreds of thousands of tourists that come into the area on a monthly basis.
SRS’ National Net Lease Group successfully completed more than 270 sales in 2017; in 2018, the group executed more than 300 transactions across more than 35 states nationwide, and has over $1 billion in assets currently listed for sale.