Single-tenant Starbucks drive-thru at Lake Elsinore Marketplace sells for $3.8M

LAKE ELSINORE, Calif. — Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of a single-tenant Starbucks Drive-Thru at Lake Elsinore Marketplace, a 144,034-square-foot shopping center anchored by Costco, Lowe’s, Grocery Outlet, PetSmart and Dollar Tree.

The sale price was $3,765,000, representing a 4.25% cap rate. Hanley Investment Group has sold $375 million in retail properties in the Inland Empire in the last 36 months including $18.6 million in retail properties at Lake Elsinore Marketplace in the last 11 months.

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Hanley Investment Group Executive Vice Presidents Kevin Fryman and Bill Asher represented the seller, Pacific Castle, based in Irvine, California. The buyer was a private investor from West Covina, California, represented by Tiffanie Wang of KW Premier Properties in Phillips Ranch, California.

Built in 2005 on 0.49 acres and renovated in 2020, the 3,200-square-foot pad building occupied by Starbucks is located at 29285 Central Avenue in Lake Elsinore.

With a sale price of $3,765,000 representing a 4.25% cap rate, this week’s sale represents Hanley Investment Group’s seventh sale at Lake Elsinore Marketplace in the last 11 months. Monaghan Communications Inc. photo

This sale represents the seventh pad building Hanley Investment Group has sold in the last 11 months at Lake Elsinore Marketplace including single-tenant properties for a Wendy’s Drive-Thru, Del Taco Drive-Thru, Panda Express, Valvoline and Wells Fargo as well as a multi-tenant pad building occupied by Navy Federal Credit Union, iBrows Threading Salon, Submarina and Juice It Up!

“We facilitated a successful pre-sale strategy and opened escrow prior to Starbucks opening for business and formal rent commencement date,” said Fryman.

“Despite the transaction being initiated during the initial months of COVID-19 being declared a pandemic, we were able to structure a sale at pre-COVID pricing, during one of the most challenging macro-economic environments we’ve experienced in over a decade,” Fryman noted.

“Even with the uncertainty caused by the pandemic, demand for single-tenant net-leased investments with drive-thrus has remained steady, if not increased in the last six months,” said Fryman.

“Although drive-thrus have been a staple of QSR revenue for decades, representing 65% to 70% of a store’s sales, they are now more popular than ever in 2020 due to health concerns and the desire to socially distance,” Asher said.

Asher added, “Starbucks had been seeking a drive-thru location for many years in this immediate trade area. Their new location at Lake Elsinore Marketplace is well-positioned for long-term future success being situated within the dominant shopping center, ideally situated on Highway 74/Central Avenue, the main retail thoroughfare connecting Orange County to Riverside County.”

“With over 32,000 stores around the world (15,243 in the U.S. as of the third quarter), Starbucks is one of the most prominent and innovative retailers in today’s market,” said Asher.

In a letter to stakeholders, Starbucks president and CEO Kevin Johnson and Starbucks chief financial officer Pat Grismer shared more specifics in how the company is accelerating the transformation of the customer and partner experience. “With approximately 80% of Starbucks customer transactions in U.S. company-operated stores ’on-the-go‘ occasions, the Starbucks leadership team has reexamined the U.S. store footprint with a vision to evolve the Starbucks retail presence over time through targeted store renovations, relocations and new stores and creating a new, elevated experience for partners and customers.”

“As a net-leased passive investment, Starbucks provides investors with a secure and stable investment that requires little to no management. Furthermore, the stores are situated in high-traffic, fundamentally sound locations with long-term intrinsic value,” Asher noted.

Hanley Investment Group has sold 25 Starbucks assets in the last two years throughout the U.S., most at record pricing.

About Hanley Investment Group

Hanley Investment Group Real Estate Advisors is a boutique real estate brokerage and advisory services company with a $6+ billion transaction track record that specializes in the sale of retail properties nationwide. Their 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. Their 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.

Submitted by Monaghan Communications Inc.


This article sponsored by:

For more information, contact Bill Tyler at Century 21 Full Realty Service.


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Contact the writer: trevor.rcns@gmail.com

Trevor Montgomery, 49, moved in 2017 to the Intermountain area of Shasta County from Riverside County and runs Riverside County News Source and Shasta County News Source. Additionally, he writes or has written for several other news organizations; including Riverside County based newspapers, Valley News, (the now defunct) Valley Chronicle, Anza Valley Outlook, and Hemet & San Jacinto Chronicle; as well as Bonsall/Fallbrook Village News in San Diego County and Mountain Echo in Shasta County.

Trevor spent 10 years in the U.S. Army as an Orthopedic Specialist before joining the Riverside County Sheriff’s Department in 1998. He was medically retired after losing his leg, breaking his back, and suffering both spinal cord and brain injuries in an off-duty accident. (Click here to see segment of Discovery Channel documentary of Trevor’s accident.)

During his time with the sheriff’s department, Trevor worked at several different stations; including Robert Presley Detention Center, Southwest Station in Temecula, Hemet/Valle Vista Station, Ben Clark Public Safety Training Center, and Lake Elsinore Station; along with other locations.

Trevor’s assignments included Corrections, Patrol, DUI Enforcement, Boat and Personal Water-Craft based Lake Patrol, Off-Road Vehicle Enforcement, Problem Oriented Policing Team, and Personnel/Background Investigations. He finished his career while working as a Sex Crimes and Child Abuse Investigator and was a court-designated expert in child abuse and child sex-related crimes.

Trevor has been married for more than 30 years and was a foster parent to more than 60 children over 13 years. He is now an adoptive parent and his “fluid family” includes 13 children and 18 grandchildren.

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