Hanley Investment Group has brokered the sale of a newly built single-tenant Starbucks Drive-Thru in Fresno, California, for US $3.18 million.
The property is located less than five minutes from California State University which has more than 25,000 enrolled students.
Hanley Investment Group Executive Vice Presidents Bill Asher and Jeff Lefko represented the seller and developer, Laguna Canyon Group, based in Orange County, California. The buyer, a private investor based in Fresno, was represented by Patrick Conway with CBRE in Glendale, California.
Starbucks Drive-Thru investments continue to attract consistent demand from net-lease investors
The buyer, a private investor based in Fresno, was represented by Patrick Conway with CBRE in Glendale, California.
Asher says: “We generated multiple qualified offers and procured a local, all-cash, 1031 exchange buyer who lives in close proximity to the property,
“We structured a timely three-week contingency period and scheduled the close of escrow upon Starbucks’ formal rent commencement.”
“Single-tenant corporate Starbucks Drive-Thru investments continue to attract consistent demand from net-lease investors due to their typical strong fundamental locations, tenant credit, and drive-thru prototype, which generates more than 70% of their business via the drive-thru.”
The new 2,250-square-foot, freestanding Starbucks-occupied building is located at 6082 North First Street, at the signalized intersection of First Street and Bullard Avenue (50,000 cars per day), and is also within walking distance of Ahwahnee Middle School which has 709 students and Hoover High School which currently educates 2,018 students. Built in 2023 on 0.55 acres, Starbucks signed a new 10-year lease with a 10 per cent increase every five years.
The property benefits from prominent pylon signage along Bullard Avenue and monument signage along First Street.
Starbucks is ideally situated between two of Fresno’s main highways; 41 (135,000 cars per day) and 168 (93,000 cars per day).
California’s Central Valley has one of the world’s largest economies and is located within four hours of 90% of the state’s population.
The city of Fresno is the largest city in the Central Valley and the fifth largest city in the state of California.
There are 360,611 people within a five-mile radius.
Asher further notes: “Investors continue to acquire Starbucks-leased investments as a flight to quality and security based on the company’s credit (S&P: BBB+), continued company innovation and site selection that typically targets the best-positioned real estate for maximum accessibility, identity and visibility.
Even with higher interest rates and slower overall transaction velocity in 2023, single-tenant investments leased to national credit tenants will continue to trade at premium historical pricing.
