New Riverside Single-Tenant Retail Property Trades at 4.52% Cap Rate

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RENTV

An L.A.-based private investor paid $2.3 mil for a two-tenant retail property occupied by a brand-new single-tenant Jack in the Box with a drive-thru and a Verizon cell tower in Riverside. The property, located at 1115 W. La Cadena Dr, traded at a 4.52% cap rate.

Built in 2018, the single-tenant, 1.9k sf Jack in the Box building sits on a 0.49-acre lot and includes a Verizon cell tower. This Jack in the Box is the company’s newest prototype design and is on an absolute NNN 20-year ground lease. This location is operated by the second largest Jack in the Box franchisee in the U.S., Feast Enterprises with 225+ locations.

There is a brand-new retail development located directly across from the Jack in the Box property. Tenants include Del Taco and 7-Eleven with a gas station.

Austin Blodgett and Eric Wohl with Hanley Investment Group Real Estate Advisors represented the seller, Greens Capital Ventures LLC, an affiliate of Irvine-based Greens Group Inc. The buyer was repped by Allen Park of Packo Investments.

“It was a challenge to get a buyer comfortable with the purchase of the Verizon Cell tower along with the Jack in the Box in the 4% cap rate range,” said Blodgett. “We had a lot of buyers that would get into the low 4% range on the Jack in the Box alone as a single-tenant deal, but as a two-tenant deal, everyone wanted to be in the 5% range.”

Blodgett continues, “Verizon Wireless is on a corporate lease and recently completed multiple renovations to the cell tower showing their long-term commitment to the site, which is ultimately what got this buyer comfortable to move forward.”

“The Inland Empire is booming with development, over 19 msf of industrial real estate is currently under construction which will ultimately draw many more people to the area to work and live. Because of this massive growth in the immediate trade area, we got a ton of activity on this property from the beginning, mostly from Los Angeles-based investors looking to move their money elsewhere in Southern California,” said Blodgett. “Riverside County has over 1.5 million residents that are expected to move into Riverside in the next 45 years (largest projected population growth in California) and unemployment is at a century-low rate of 4.1 percent (350,000 jobs were added in the last nine years).”

Blodgett and Wohl expect that cap rates will remain steady for single- and two-tenant net-lease retail assets in the Inland Empire as investors look for high-quality investments with little to no maintenance requirements.