Sales of a Starbucks Cafe in Los Angeles and two, new construction Starbucks Drive-thrus (in Louisiana and Florida) achieve record pricing
CULVER CITY, Calif., ALEXANDRIA, La. and OCALA, Fla. – RealEstateRama – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, and Enduring Real Estate, a San Diego-based retail advisory firm with a 35-year operating history, announced today that the firms have arranged the sales of three, single-tenant net lease retail properties occupied by Starbucks to successfully help facilitate a 1031 exchange. The combined value of the sales was approximately $10 million.
According to Hanley Investment Group’s Executive Vice President Bill Asher, “We marketed and sold a single-tenant Starbucks Cafe (without a drive-thru) located in Los Angeles County with a shorter-term lease for our client (his downleg property), and then sourced two, new construction Starbucks Drive-thrus in Louisiana and Florida to fulfill (as our client’s upleg properties) a 1031 exchange. The process allowed our client to improve his yield and acquire two Starbucks investments, each with a drive-thru and long-term lease.”
Asher adds, “With high-quality retail assets in high demand and short supply, Hanley Investment Group is continuing to work with investors to not only help them sell their existing retail asset(s) but also source upleg opportunities that achieve their investment goals, whether that is on- or off-market deals in markets across the U.S.”
The downleg property, a 2,249-square-foot Starbucks building in Culver City, California, is located at 12313 Jefferson Boulevard, a hard corner, signalized intersection with 46,000 cars per day. The building was built in 2007 on 0.32 acres and is ideally situated at the entrance to Playa Vista, which is home to Facebook, Google, Microsoft, Yahoo, YouTube, Fox Sports, Nike and WeWork. The sale price was $5,096,000, representing $2,266 price per square foot. Joe Wojdowski of Enduring Real Estate in San Diego, in conjunction with Asher and Hanley Investment Group’s Executive Vice President Jeff Lefko, represented the seller, a Los Angeles-based private investor. The buyer, a private investor also based in Los Angeles, was represented by Farzad Halavi in Los Angeles.
“The sale represents a record price per square foot for a non-drive-thru Starbucks on a short-term lease,” said Wojdowski. “We procured an all-cash, Los Angeles-based buyer during the first week of marketing and negotiated a 10-day contingency period and substantial, non-refundable deposit that helped secure the property for the buyer and provided the seller with a certainty of commitment to the purchase. Additionally, we structured a 90-day, seller-closing extension in order to help more effectively secure 1031 exchange upleg investments for the seller.”
Shortly after closing escrow on the sale of the Starbucks in Culver City, Hanley and Enduring arranged the sale of two, new construction, upleg properties: a single-tenant Starbucks Drive-thru in Alexandria, Louisiana and a single-tenant Starbucks Drive-thru in Ocala, Florida.
The Alexandria, Louisiana Starbucks Drive-thru property, a new, 2020-construction, 2,211-square-foot building on 0.48 acres, is located at the hard corner, signalized intersection of MacArthur Drive (US. Highway 71) and Elliot Street at 755 MacArthur Drive. There are more than 37,000 cars per day along Highway 71, a major north-south U.S. thoroughfare connecting Louisiana. The sale price represented a cap rate of 5.06%. The seller was Dorsey Development of Metairie, Louisiana. Hanley Investment Group’s Asher, Lefko and Senior Associate Beau Velten, in conjunction with Wojdowski at Enduring and ParaSell, Inc., represented the seller and buyer, a private investor based in Los Angeles.
“In a nationwide search, we utilized a developer relationship to source the Starbucks drive-thru investment opportunity in Alexandria. We were able to timely negotiate a mutually beneficial transaction at a price that met the seller’s expectations and achieved the buyer’s 1031 investment criteria,” said Asher. “The buyer purchased an ideal secure and stabilized Starbucks investment, the only drive-thru location in Central Louisiana with the next closest one 85 miles away.”
In Ocala, Florida, Enduring Real Estate and Hanley Investment Group arranged the sale of a brand-new, 2021-construction, single-tenant 2,500-square-foot Starbucks Drive-thru at the signalized intersection of SE Maricamp Road and SE 36th Avenue with 55,600 cars per day. Located at 3537 SE Maricamp Road, the property sits on a 1.04-acre parcel to the Saddleback Square Shopping Center, which is currently being redeveloped. The sale price represented a cap rate of 5.09%. The seller, a private investor based in Tulsa, Oklahoma, was represented by Sonny Molloy, Jared Kaye and Cole Snyder of Marcus & Millichap of Atlanta, Georgia. Hanley Investment Group’s Asher and Wojdowski at Enduring, along with ParaSell, Inc., represented the buyer, a private investor based in Los Angeles.
Wojdowski noted as stated in a Q4 2020 Starbucks press release that approximately 75% of U.S. sales volume came from drive-thru and Mobile Orders. “The buyer owned other Starbucks Drive-thru investments and purchased another high-quality drive-thru asset with a new long-term lease in a stabilized and growing Central Florida market to help the buyer fulfill his 1031 exchange requirement,” added Wojdowski.
In the last 24 months, Hanley Investment Group has sold 38 Starbucks properties across the U.S., many at record pricing. Asher reports that Hanley Investment Group recently marketed a brand-new construction, single-tenant Starbucks Drive-Thru in Stockton, California, and generated multiple offers for the freeway-adjacent property in the first week of marketing and secured a Southern California-based 1031 exchange buyer that closed escrow at nearly 99% of the list price representing a record-low cap rate for California’s Central Valley.
Sales cap rates for single-tenant Starbucks Drive-Thru investments have compressed an estimated 15 to 20 basis points in the last six months, notes Asher. According to Starbucks’ 2Q 2021 report, mobile orders now make up 26% of total orders at U.S. company-operated retail stores (up from 18% in the year-ago quarter). Starbucks credited increased drive-thru sales and digital ordering with a strong 2Q, noting that its U.S. stores have made a full sales recovery from the pandemic; revenue was up 11% over the same period last year at $6.7 billion. Starbucks plans to open 22,000 locations to bring its massive store count to 55,000 by 2030.
About Enduring Real Estate
Serving San Diego and the Imperial Valley for over 35 years, the Enduring Real Estate Team has placed the best in class retailers throughout the market in hundreds of shopping centers, malls, street retail, lifestyle centers and in the urban core. Through relationships, reputation, and a passion for the retail experience, we provide the latest tools and opportunity for each unique retail concept to obtain optimal sales performance and market penetration. Engaging personal service and duty to client create deep and ENDURING relationships. See www.enduringrealestate.com.
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a real estate brokerage and advisory services company with an $8.1 billion transaction track record that specializes in the sale of retail properties nationwide. Our expertise, proven track record, and unwavering dedication to putting clients’ needs first, sets us apart in the industry. Hanley Investment Group creates value by delivering exceptional results through the use of property-specific marketing strategies, cutting-edge technology, and local market knowledge. Our nationwide relationships with investors, developers, institutions, franchisees, brokers, and 1031 exchange buyers are unparalleled in the industry, translating into maximum exposure and pricing for each property. With unmatched service, Hanley Investment Group has redefined the experience of selling retail investment properties. For more information, visit www.hanleyinvestment.com.
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