Hanley Investment Group has brokered the sale of two newly constructed single-tenant retail properties at the Cathedral Cove shopping center in downtown Cathedral City, California.
Leased by a soon-to-open Circle K convenience store and gas station, and Starbucks, the properties were acquired by private buyers in separate transactions for a combined total of approximately US $8 million, with Hanley Investment Group Executive Vice Presidents Bill Asher and Jeff Lefko representing the seller, Fountainhead Development (a Newport Beach-based developer specializing in retail and restaurant projects).
Circle K Convenience Store and Gas Station
The Circle K-leased property, located at 68835 East Palm Canyon Drive, was sold for over US $4.19 million to a private 1031 exchange investor from Ventura, who was represented by Joe Ahearn of Pinnacle Estate Properties.
The 3,700-square-foot convenience store sits on a 1.08-acre pad and features a new 20-year absolute triple-net ground lease with 10 per cent rental increases every five years.
Circle K Stores, a subsidiary of Alimentation Couche-Tard (S&P: BBB+), operates more than 16,800 stores globally, including over 7,100 in the U.S.
The company ranks #2 in CSP Magazine’s “Top 40 C-Store Chains” (2024) and #2 in Franchise Chatter’s “Top Convenience Store Franchises” (2024).
Asher says: “We generated multiple qualified offers within the first 30 days of marketing due to the rare 20-year initial lease term and outstanding location on Highway 111, the main retail corridor connecting the Coachella Valley.
"We successfully executed a pre-sale marketing strategy, procured a buyer while the property was still under construction, and closed escrow before the tenant began paying rent and before Circle K opened for business.”
“Essential retail assets like corporate-leased convenience stores with a fuel station continue to attract strong investor interest.
“Their long-term leases, daily-use appeal, and resilience in all economic cycles make them a preferred choice for buyers seeking dependable income.”
The store and gas station are scheduled to open in the fall.
Starbucks Café and Drive-Thru
The Starbucks branch located at 68995 East Palm Canyon Drive, sold for US $3.7 million.
The buyer, a private investor in a 1031 exchange from Roseville, was represented by Alexander Moore of SRS Real Estate Partners.
The 1,900-square-foot café sits on a 0.79-acre pad and is leased to Starbucks Corporation (Nasdaq: SBUX; S&P: A-) under a new 10-year triple-net lease with 10% rental increases every five years and four five-year renewal options.
Essential retail assets like corporate-leased convenience stores with a fuel station continue to attract strong investor interest.
“We secured a buyer who was excited to add the property to their portfolio and knew the area well, having recently purchased another net-leased investment in the Coachella Valley,” says Asher. “Similar to the Circle K sale in the same development, we executed a pre-sale strategy by procuring the buyer while the property was still under construction and closed escrow before the tenant began paying rent and before Starbucks opened for business.”
Starbucks operates approximately 38,000 stores in 84 countries and has been named one of Fortune’s “World’s Most Admired Companies” for 16 consecutive years, including 2024.
According to Asher, drive-thru locations account for between 60 and 70 per cent of quick-service restaurant sales, and Starbucks stores with drive-thrus average 50 per cent higher sales than non-drive-thru locations.
Record-Setting Chipotle Sale
In January, Hanley Investment Group also arranged the sale of a newly constructed Chipotle Mexican Grill Drive-Thru at Cathedral Cove Center.
The 2,325-square-foot property, located on a 0.65-acre parcel, sold for US $4.05 million to a Los Angeles-based, all-cash 1031 exchange buyer.
The sale closed within 30 days, prior to rent commencement or store opening, and achieved a record-low cap rate for a single-tenant Chipotle nationwide in 2025.
About Cathedral Cove Center
Cathedral Cove Center is located in an Opportunity Zone at the signalized intersection of East Palm Canyon Drive/Highway 111 and Date Palm Drive, one of Coachella Valley’s busiest intersections with over 55,000 cars per day.
The center is directly across from the 125,000-square-foot Agua Caliente Casino Cathedral City, ranked in the top 2% of U.S. casinos based on consumer traffic, according to Placer.ai.
The tenant lineup at the Cathedral Cove Center includes a Farmer Boys Drive-Thru restaurant (coming soon for sale), along with previously sold pads leased to Circle K, Starbucks, and Chipotle Mexican Grill.
A new residential development is planned directly behind the property.
The Coachella Valley is home to four casinos and more than 130 golf courses.
It attracts over 14 million annual visitors and hosts world-renowned events such as the Coachella Valley Music and Arts Festival (540,000+ attendees), Stagecoach Festival (80,000+), Riverside County Fair and National Date Festival (315,000), BNP Paribas Open (475,000), and the American Express PGA Golf Tournament (7,000+).
“Investor appetite for new-construction, net-leased retail remains strong, especially in infill Southern California markets,” adds Asher.
