NoCal Buyer Pays $783/sf for Sacramento Retail Property

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RENTV.com

A Sacramento area retail center was acquired by a Bay Area investor in a deal with a price tag of $2.74 mil. The property, a new-construction, two-tenant, retail pad building occupied by Dunkin’ Drive-Thru and T-Mobile at a FoodMaxx grocery-anchored shopping center,traded at a 5.25% cap rate, the lowest cap rate for a two-tenant pad in the Sacramento and Yuba/Sutter metro areas.

The newly renovated 3.5k sf ($783/sf) freestanding pad building was developed in 2018 by Capital Rivers Commercial developed, on behalf of the seller. Dunkin’ Drive-Thru occupies 2.3k sf and T-Mobile occupies 1.2k sf. Both Dunkin’ and T-Mobile have new long-term triple-net leases with 10% increases every five years.

The structure sits on 0.39 acres at 1040 Colusa Ave in Yuba City, at the signalized intersection of two major highways, Highway 99 and Highway 20 (Colusa Avenue), with over 60,000 cars per day. The property is an outparcel to Sutter Crossroads shopping center, which includes FoodMaxx, Big 5 Sporting Goods, Goodwill, El Pollo Loco and Red Robin. It is also located across the street from Yuba Sutter Mall, a 408k sf regional mall anchored by JCPenney, Sears, Ross and Planet Fitness.

Jeff Lefko and Bill Asher with Hanley Investment Group Real Estate Advisors, along with Greg Aguirre of Capital Rivers Commercial, represented the seller, a private investor based in Sacramento. The all-cash, Redwood City-based buyer was repped by Nigel Keep of Kidder Mathews in San Jose, California.

“The development of the project required some creative solutions including the conversion of the former bank vault into the walk-in cooler for Dunkin’ and making the drive-thru large enough to accommodate full-size trucks, which are common in the Yuba City market,” said Aguirre.

“Approximately 60% to 70% of all business for quick-service restaurants come through the drive-thru,” said Asher. “Time-pressed consumers are looking for convenience and eating and drinking on the run has become commonplace. Average store sales are approximately 50% greater in locations that have a drive-thru.”