LEE’S SUMMIT, MO – RealEstateRama – 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 arranged the sale of two freeway-adjacent, brand-new construction, retail investments occupied by Taco Bell and Scooter’s Coffee with drive-thrus located on an outparcel in front of a grocery-anchored shopping center in the Kansas City metro area. The sale price for the two freestanding buildings in Lee’s Summit, Missouri was $3,338,000, representing a 5.35% cap rate and $1,209 per square foot.
Hanley Investment Group Executive Vice Presidents Jeff Lefko and Bill Asher, Senior Associate Beau Velten, alongside Managing Director Jeff Christian with First Street Brokerage, represented the seller, a San Francisco Bay Area-based private investment company. The buyer was a private investor from Battle Ground, Washington, represented by Deborah Ewing of Fuller Group CRE of Vancouver, Washington.
Despite the challenges of the COVID-19 pandemic, this sale marks Hanley Investment Group’s fifth retail transaction in Missouri and its 26th Midwest retail sale this year.
Built in 2019, the two-tenant Taco Bell and Scooter’s Coffee-occupied property is located at 851 NE Woods Chapel Rd., on a 1.0-acre parcel at the on/off ramp of the Interstate-470 freeway and NE Woods Chapel Rd. Taco Bell occupies a 2,160-square-foot drive-thru building with a new, long-term, absolute triple-net lease with increases every five years. Scooter’s Coffee occupies a 600-square-foot drive-thru building with a new, long-term, absolute triple-net ground lease with increases every five years.
According to Lefko, “This property represented a rare opportunity to purchase two quick-serve restaurants on one parcel with little to no landlord responsibilities. Both tenants are open and operating and benefit from having a drive-thru. Previous to Scooter’s opening at this site, area residents had to drive over three miles to get a drive-thru coffee.”
The two freestanding buildings are located on an outparcel to a Price Chopper-anchored shopping center. Price Chopper is the dominant grocer chain in the Kansas City area with 55 stores across Kansas, Missouri and Iowa.
“We procured multiple qualified offers and transacted at 99% of the list price to a West Coast-based 1031 exchange buyer during the initial months of the pandemic,” said Velten. “The asset was a very attractive investment given the changing market conditions due to COVID-19. The property featured many fundamental retail real estate characteristics sought out by passive investors in today’s market — two drive-thru tenants at a signalized hard corner adjacent to a freeway on/off-ramp and in-front of a high-volume grocery-anchored shopping center.”
Lefko adds, “Our goal was to achieve single-tenant pricing for a two-tenant investment that normally receives a 50 to 75 basis point higher cap rate. However, this property offered prospective buyers the best of both a single-tenant and multi-tenant property: the rare absolute triple-net leases created a truly passive investment and the two incomes streams provided investment diversity.”
Lee’s Summit is consistently ranked as a top-tier Midwest suburb. In 2018, Money magazine named Lee’s Summit one of the Best Places to live. It is known for its outdoor areas including 26 different parks while still being in close proximity to Downtown Kansas City. There are 2.1 million people in the Kansas City metro area, which was ranked #20 in Wall Street Journal’s 2019 Hottest Job Market out of 381 U.S. metro areas. The Kansas City metro area has benefited from the influx of tech and healthcare companies moving to the area.
Taco Bell is the nation’s leading Mexican-inspired quick-service restaurant with approximately 7,400 stores at the end of the second quarter, June 30, 2020. Under the parent company, Yum! Brands Inc. (NYSE: YUM), Taco Bell is part of a family of fast-food powerhouses which include both KFC and Pizza Hut as well as The Habit Burger Grill. The Lee Summit location is leased to an experienced franchisee that operates over 200 locations.
Scooter’s Coffee is a drive-thru franchise that has been serving world-class coffee for more than 20 years and has nearly 300 locations in 16 states across the nation.
“Social distancing and contact-free service are now the norm,” said Lefko. “But drive-thru kiosks and restaurants are uniquely positioned to succeed despite COVID-19 restrictions, which has made these investments a hot commodity for investors. Additionally, properties that are shadow-anchored by a top-tier grocery chain are seeing the highest demand and we expect this trend to continue.”
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. 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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