Hanley Investment Group Arranges Sale of Starbucks/QDOBA Retail Property in Sioux City, Iowa
Hanley Investment Group's Vice President Jeff Lefko and Executive Vice President Bill Asher represented the seller, N3 Real Estate of Southlake, Texas, as well as the buyer, a family trust based in Orange County, Calif.
Renovated in 2015, the two-tenant, 5,002-square-
Lefko notes that Starbucks is well-positioned in the market for long-term success as it is only one of two Starbucks drive-thrus located in Sioux City. The other is more than eight miles away.
"We procured an all-cash, 1031 exchange buyer based in Southern California and obtained a record cap rate for a two-tenant net-leased investment in the Midwest that had approximately 65 percent of the original lease terms remaining for both tenants," said Lefko.
"The two-tenant property offered the buyer an ease-of-management, quasi-single-
According to Starbucks Corporation (NASDA SBUX) second-quarter 2019 results, the company opened 319 net new stores in Q2, yielding 30,184 stores at the end of the quarter, a 7 percent increase over the prior year; 94 percent of net new store openings were outside of the U.S. while 88 percent were licensed.
QDOBA Mexican Eats, is a leading fast-casual Mexican food brand in the U.S., with more than 750 restaurants located across the U.S. and in Canada. Committed to using quality, freshly prepared ingredients, the brand makes a range of menu items in its restaurants' kitchens daily. Guests are encouraged to experience QDOBA's delicious flavors by enjoying one of the brand's signature entrées or by customizing their burritos, tacos, burrito bowls, salads, quesadillas, nachos and tortilla soup to fit their personal tastes. QDOBA was recently acquired by Apollo Global Management, LLC (NYSE APO; S&P: A) from Jack in the Box Inc.
Last year in Sioux City, Lefko and Asher completed the sale of a single-tenant Starbucks drive-thru (the only other Starbucks drive-thru in the city) for $1.3 million and a single-tenant Texas Roadhouse for $1.85 million. They also facilitated the sale of a single-tenant Kohl's in Cedar Rapids, Iowa, for $8.1 million.
"West coast investors continue to seek a better return in Midwest markets like Sioux City for assets leased to national credit tenants," said Lefko. "Sioux City and other similar markets feature very low unemployment rates historically and while they may not experience huge rent growth, they are insulated from big rent declines."
"As the retail investment market continues to transition this year, the Starbucks, Qdoba sale in Sioux City further demonstrates that investors will continue to transact at premium pricing for properties with excellent real estate fundamentals in 'A' locations in markets across the country," Asher noted.
About N3 Real Estate
N3 Real Estate is a fully integrated retail real estate investment and development firm based in Southlake, TX focused on developing restaurant, retail and net lease real estate. Founded in 2004, N3 has acquired and developed single and multi-tenant commercial projects and shopping centers for national, regional and local retailers and restaurants across the United States. Today, N3 owns and manages retail projects for its investors at a value of more than $250 million. See: www.n3realestate.com
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $6+ billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestmentgroup.com
Jeff Lefko | firstname.lastname@example.org
Hanley Investment Group