San Bernardino, Calif. (March 12, 2018) – SRS’ National Net Lease Group announced today that senior vice president, Michael Walseth of the NNLG, represented the seller in the sale of a brand new single-tenant Starbucks corporate lease in San Bernardino, Calif. The purchase price was $5.294 million and the highest recorded price for a newly constructed Starbucks Café in the U.S. on record, according to CoStar.
The seller, an Orange County based real estate investment and development firm, was represented by Walseth. The buyer, a local private 1031 exchange buyer, was represented by Chris Nikchevich of TNG Real Estate Services, Inc.
Built in 2017 on 1.15 acres, the 3,000-square-foot drive-thru property is located at the apex of the signalized intersection of University Pkwy and N. State Street, the busiest intersection in the Cal State San Bernardino trade area. According to Walseth, “The Starbucks building is situated on a stand-alone parcel that has high visibility and easy access to all traffic in route to Cal State San Bernardino from Interstate 215 and the surrounding area. The newly built Starbucks Café will serve as the preeminent off campus meeting and study venue for Cal State San Bernardino students, teaching and administrative staff. ”
According to Walseth the new 10-year corporate lease is guaranteed by Starbucks Corporation, a publicly-traded company (NYSE:SBUX) and an investment grade-rated company with a Standard & Poor’s rating of A-. The lease also includes 10 percent increases every five years. The new construction restaurant is the company’s latest café/drive-through prototype. Starbucks is the world’s leading coffee company and coffeehouse chain with approximately 26,000 locations in over 60 countries.
“Starbucks is a world-class brand and continues to be one of the most sought-after single-tenant retail investments in today’s market,” said Walseth. “We continue to see Starbucks and other high quality, credit NNN’s trade at record low cap rates in spite of the most recent rise in interest rates. Investors continue to recognize and seek the long term value, ease of management, and stability found in high quality, well located net-leased assets.”
Walseth adds “Recognizing a smaller buyer pool for the $5 million plus investment offering, we chose to market the property early in the development phase. This strategy ensured buyer interest would reach a pinnacle level at the developer’s preferred time of sale. After touring multiple buyers through the site during the construction phase, the ultimate buyer was selected just prior to Starbuck’s receipt of occupancy with a closing shortly thereafter. This sale demonstrates a great case study of synchronized execution strategy between developer and the NNLG investment team concluding with an achievement of record pricing for the asset.”
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