Riverside’s Sonic Drive-In Sells for Record Cap Rate of 4.70%
Hanley Investment Group and Lee & Associates Sell Single-Tenant Sonic Drive-In at Record-Breaking Cap Rate Nationwide. Property Trades for $2.6 Million
Riverside, CA – Hanley Investment Group Real Estate Advisors, a nationally-recognized real estate brokerage and advisory firm specializing in retail property sales, in conjunction with Lee & Associates, announced today that the two firms completed the sale of a single-tenant Sonic Drive-in located at 9505 Magnolia Avenue in Riverside, Calif. The sale price of $2,555,000 represented a cap rate of 4.70%, a record low for a single-tenant Sonic Drive-In restaurant nationwide.
Hanley Investment Group Executive Vice President Bill Asher, along with Lee & Associates Senior Vice Presidents Jon Friesen and Jeff Stanley, represented the seller, Evergreen – Magnolia & Van Buren NWC, L.L.C. (an entity of Evergreen Devco, Inc. in Glendale, Calif). The buyer, a private investor from Los Angeles, was represented by Paul Bahk of Realtex Properties, Inc. in Los Angeles.
Built in 2015, the 3,275-square-foot Sonic Drive-in is situated on a .50-acre parcel at the signalized intersection of Magnolia Avenue and Van Buren Avenue, one of the highest trafficked intersections in Riverside with average daily traffic counts of 75,000 cars per day. Additionally, the building was the winner of the Beautification Award for 2015 by the city of Riverside.
“The investment featured an outstanding combination of characteristics that led to a record sales price,” said Asher. “It was leased to the largest Sonic franchisee in southern California, boasted a new long-term absolute triple-net lease with rental increases every five years and was in an ‘A+’ location in Riverside – a market with over 255,000 people within a five-mile radius.”
“Since opening in November 2015, this particular Sonic Drive-in location was trending to be one of the top performing Sonics in the chain for the franchisee and a top performer nationwide,” said Friesen. “It was an attractive selling point that played a role in obtaining a record low cap rate sale.”
According to Asher, “Investor demand for a high performing, well-located single-tenant triple-net leased property is still very strong in today’s market. Buyers continue to pay premiums for these types of properties seeking long-term cash flow, with relatively low risk and little to no maintenance. As investors continue to look for security, we expect that the demand for high quality retail assets will remain strong through 2016.”
About Evergreen Development
Evergreen was founded in Phoenix in 1974 and is a fully-diversified retail and multi-family development company. Managing partners Bruce Pomeroy, Andrew Skipper and Laura Ortiz oversee the company, which has earned a reputation as an industry leader by delivering high-quality real estate developments. Evergreen works throughout the nation, and has offices in Arizona, California and Colorado. The Evergreen team is committed to partnership, value and creative problem-solving, making it one of the most respected real estate companies in the West. For more information, visit www.evgre.com.
About Lee & Associates
Celebrating more than 37 years of leadership excellence in commercial real estate, Lee & Associates is the largest broker-owned firm in North America with locations across the U.S. and Canada including Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Maryland, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Texas, Vancouver BC and Wisconsin. With more than 800 brokers nationwide, Lee & Associates provides a wide range of specialized commercial real estate services on a local, regional and national level. For the latest news from Lee & Associates, visit lee-associates.com.
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $5 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.hanleyinvestment.com.