Rialto, CA – Nov 14, 2023 - Faris Lee Investments is pleased to announce the successful sale of a 15-year absolute triple net (NNN) ground lease Dutch Bros with a corporate guaranty in Rialto, California, for $2.325 million. This transaction facilitated by Faris Lee Investments, underscores the firm's commitment to delivering successful outcomes and its dedication to providing outstanding retail advisory and investment sales services.
Nick Miller, Director, and Shaun Riley, Managing Principal, played instrumental roles in representing the buyer throughout this transaction.
The property is a brand-new 2023 construction, featuring a double drive-thru on a spacious 1.1-acre lot, located off the 10 Freeway. Dutch Bros, a publicly traded company (NYSE: BROS) with over 715 locations and annual revenues exceeding $950 million, occupies the property, providing a strong credit profile for the investment.
While the transaction ultimately proved successful, it was not without its challenges. Negotiating multiple lease amendments with the seller was a crucial aspect, aimed at reducing the buyer's risk exposure as a result of several unforeseen hurdles. The transaction also unfolded in a rapidly changing interest rate environment, leading to upward pressure on cap rates during the negotiation phase.
Faris Lee Investments employed a strategic marketing approach that significantly contributed to the transaction's success. The team focused on Single-Tenant, Net-Lease (STNL) Drive-Thru properties in the Inland Empire region, offering investors stable income and minimal management responsibilities. The marketing campaign strategically emphasized the strengths of the underlying real estate, the trade area's potential, and the tenant's creditworthiness.
The transaction was successfully completed as an all-cash deal, with a local Orange County investor who owned nearby properties. It closed at a 4.77% capitalization rate (cap rate) and achieved a price per square foot of $2,447.
“We takes pride in our role in this transaction, as we align with the buyer's investment objectives and goals,” said Shaun Riley. “This successful acquisition demonstrates Faris Lee's expertise and commitment to delivering value in the retail real estate market,” said Nick Miller.
About Faris Lee Investments:
Faris Lee Investments is a retail brokerage advisory firm founded in 1996 and is based in Irvine, California. The firm specializes in commercial real estate investment sales, brokerage, and advisory services. In addition, the firm provides a national marketing platform of properties for sale, asset appraisal, property valuation, debt structuring, negotiation, market research, and analysis services. Faris Lee combines underwriting and research that exceeds industry standards with a marketing strategy to transform investment potential, enhance value and provide their clients the competitive advantage needed when making investment decisions. The firm also serves as institutional advisors in the areas of acquisitions and dispositions, merchant banking, distressed asset disposition, private equity, and corporate sale-leaseback. For more information, visit www.farislee.com