Hanley Investment Group Real Estate Advisors arranged the sale of two new construction, single-tenant properties occupied by a Quick Quack Car Wash to two private buyers within 30 days. The two properties in Grand Terrace and Lodi sold for a combined $5.38 million, each with a new absolute triple-net ground lease with an initial term of 20 years.

In the first transaction, Hanley EVPs Bill Asher and Jeff Lefko represented the seller and developer, 5th Street Development in Del Mar, in the sale of a new Quick Quack Car Wash ground lease at 22181 Barton Rd. in Grand Terrace for $2.7 million. The buyer, a Pasadena-based private investor, was represented by Patrick Toomey, executive director with Institutional Property Advisors. 

In the second transaction, Asher and Lefko represented the seller of a new ground lease at 515 S. Lower Sacramento Rd. in Lodi for $2.68 million. The property was developed by MEE Capital Investments and AdVal Properties, Inc. The buyer, a central California-based private investor, was represented by John Kourafas at Visintainer Group.

Hanley Investment Group Real Estate Advisors arranged the sale of three new-construction, single-tenant properties occupied by a 950-square-foot Dutch Bros Coffee drive-thru format to three different private buyers in 30 days. The properties, which sold for a combined $8.08 million, each have a new 15-year initial absolute triple-net lease term. 

In the first transaction, Hanley EVPs Bill Asher and Jeff Lefko represented the seller and developer, Evergreen Development, in the sale of a new Dutch Bros ground lease at 14521 Ramona Blvd. in Baldwin Park for $3.32 million. The buyer, a San Gabriel Valley-based private investor, was represented by Brian Melkesian, an SVP with Lee & Associates in Ontario.

In the second transaction, Asher and Lefko represented the seller and developer, Evergreen Development, in the sale of a new Dutch Bros ground lease at 23140 Hemlock Ave. in Moreno Valley for $2.61 million. The buyer, a Los Angeles-based private investor, was represented by Ashley Berglund, of Granite Capital Group in Santa Barbara.

In the third transaction, Asher and Lefko represented the seller and developer, a local private investment firm, in the sale of a new Dutch Bros ground lease at 526 Nestles Rd. in Soledad for $2.15 million. The buyer, a private investor based in Northern Los Angeles County, was represented by Maxi Case with Century 21 Doug Anderson in Lancaster.

Partners Real Estate has brought on Atlanta Land Sales brokers Matt Hawkins, Pierce Owings, and Sarah Morgan. Their role is to grow the firm’s land sales practice in Atlanta.

Since opening in June 2024, the company’s newest office is now more than 20 brokers strong and boasts expertise across the gamut of commercial real estate offerings, including Office Tenant Representation, Office Agency Leasing, Industrial Services, Development, and now Land.

Hawkins , who came from Cushman & Wakefield, arranged over $2 billion in transactions, and facilitated the land sales for projects that shaped the region such as Truist Park, The Battery, and Rowen to name a few.

Pierce Owings, who also came from Cushman & Wakefield, joins as an Equity Partner. Owings delivered sites now home to Madison Yards and 99 West Paces.

Sarah Morgan will serve as Senior Associate. Sarah joined the land team in 2023 after working as a Senior Consultant at Deloitte.

A retail portfolio spanning 120 JCPenney stores across the U.S. could fetch more than $1 billion in what industry professionals are calling a rare offering for an institutional investor, CoStar reported. 

Newmark plans to list the 15.86-million-square-foot portfolio in 34 states early next month on behalf of Copper Property CTL Pass Through Trust, the entity formed in the wake of JCPenney’s 2020 bankruptcy proceedings.  

The trust was created in 2021 to sell 160 stores and a half-dozen industrial properties to help reimburse the retailer’s investors. It has completed the sales of 37 stores and six warehouses. 

The 120 stores Newmark plans to market are long-term leased to JCPenney. The average store size in the portfolio is 132,000 square feet on an average tract of 8.36 acres. 

“We are marketing this globally,” Newmark managing director Paul Penman told CoStar. “Everyone is going to see it, but with the store locations being in 34 states and not just in the gateway markets, I would expect this to attract domestic capital already familiar with JCPenney.” 

With pricing down 19% from its 2022 peak, the U.S. commercial real estate sales market is starting to come back to life, Bloomberg News reported. One reason is that lenders and owners want to cut their losses and make new investments now that the Federal Reserve’s first rate cut in four years is bringing some clarity on where valuations stand. 

“There’s going to be definitely more activity in 2025 and it’s going to be a mix of drivers that’s going to lead to significant instability for some, with some significant opportunity for others,” David Aviram, co-founder of Maverick Real Estate Partners, told Bloomberg. Struggling properties that took on too much debt at much lower rates will drive many of the transactions, he said. 

Bloomberg reported that sellers often have had to offload properties at steep discounts in recent months, notably in the office sector. Earlier this year, Empire Capital Holdings and Namdar Realty Group struck a deal to buy the office property at 321 W. 44th St. at a 67% discount from its 2018 purchase price. The former Chicago headquarters of Cboe Global Markets Inc. (pictured) sold this summer for about half its pre-pandemic value. 

“Data this year through July underscores just how tough a market it’s been,” reported Bloomberg. “Transactions were down 5% from a year earlier to $203.8 billion, according to MSCI Inc. But lately, transaction volumes are showing ‘steady’ improvements, the data provider said in a report.” 

Additionally, there are signs that more bidders are eyeing property and loan sales. Recently, Parkview Financial marketed about $300 million of loans tied to apartments and offices in New York, New Jersey, and Connecticut. Each loan received multiple offers with bids averaging about 95% of face value, CEO Paul Rahimian told Bloomberg.

The distressed property market is just beginning to unfold, with significant challenges still ahead. On October 22, hear experts from Trimont, Greystone, Transwestern and more discuss the rising tide of distressed assets, upcoming CMBS maturities, and stricter underwriting practices. Gain insights into what lies ahead as we transition into 2025 at Connect Distressed Investment & Finance at the Luxe on Sunset in LA.

SRS Real Estate Partners Capital Markets said that over the past 18 months, the firm has sold a total of 50 drive-thru properties occupied by single-tenant, net-leased coffee shops including Starbucks, 7 Brew, Caribou Coffee, Dunkin’, Dutch Bros Coffee and Scooters Coffee House. All told, the transactions are valued at $135 million with an average closing cap rate of 5.52%. Additionally, SRS has 45 active coffee shop listings or in escrow with a total value of $124 million.

“While the investor favorite from a brand and credit perspective remains Starbucks, developers and property owners now have a much wider and growing pool of coffee users to consider when offering a coffee shop amenity to their property,” said Patrick Luther, principal & managing director with SRS. “Investors have been clamoring for these cash-flowing, low maintenance single-tenant assets especially with brands that are aggressively expanding and seeking more U.S. locations to capture a growing market share.”

The majority of SRS’ recently completed deals and those in escrow are new construction assets with fee simple ownership, ground lease (land ownership) and sale-leaseback scenarios. Due to the nature of the asset, they are overwhelmingly located in busy retail corridors and are usually a part of a larger retail center, creating strong crossover traffic and a dense customer population.

The Newport Beach-based SRS Real Estate Partners Capital Markets team has sold a total of 33 7-Eleven-occupied properties over the past 18 months, valued at $242 million with an average cap rate of 5.27%.

Additionally, SRS has 24 7-Eleven assets currently in escrow or on the market with a combined value of approximately $160 million. All the assets are single-tenant properties with 12 or more years remaining on the lease term.

“Over the past 12 months or so, we have observed that cap rates for 7-Eleven stores are holding steady despite the higher interest rate environment,” said Patrick Luther, SRS EVP and managing principal. “Additionally, the absorption of 7-Eleven assets outpaces comparable credit tenants such as drug store and coffee brands and we have not seen values erode or cap rates rise as much for this brand. Investors are benefitting from the long-term stability, high traffic locations and strong credit rating of this internationally recognized chain.”

Over the past 18 months, SRS has sold 7-Eleven assets in California, Colorado, Connecticut Florida, Nevada, New York, New Jersey, North Carolina, South Carolina, Oklahoma, Tennessee and Texas. The company has properties on the market in California, Florida, New Jersey, North Carolina, South Carolina, Tennessee and Texas.

CBRE finalized the sales of two six-unit multifamily properties in San Clemente to individual private investors, resulting in a combined sale price of $5,545,000. EVP Dan Blackwell, first VP Mike O’Neill and associate Amanda Fielder represented both the buyers and the same seller in the two transactions.

In the first transaction, Blackwell, O’Neill and Fielder represented the repeat client investors, a private buyer from San Clemente and the San Diego County-based seller, in the $2,820,000 sale of a six-unit, 3,535-square-foot multifamily property at 306 Cazador Ln. in San Clemente.

In the second transaction, Blackwell, O’Neill and Fielder represented the repeat buyer, a private buyer from Newport Beach, and the San Diego County-based seller, in the sale of a six-unit, two-story multifamily property at 239 Avenida Pelayo for $2,725,000.

“The San Clemente market offers multifamily investors a rare blend of coastal charm, robust rental demand, and promising investment potential,” said O’Neill. “With its desirable location and strong demographics, San Clemente presents an excellent opportunity for investors seeking long-term growth and stability in the coastal multifamily sector.”

SRS Real Estate Partners Capital Markets, based in Newport Beach, said that over the past 12 months, the firm has sold a total of 10 properties occupied by Chick-fil-A valued at $48 million with an average cap rate of 4.2%. The company said this figure gives it a 30% market share for all Chick-fil-A-occupied assets sold over the same period, the largest among all other brokerage firms nationwide.

“SRS has built a reputation for its national network of experienced single-tenant net lease brokers that have connections with a diverse buyer pool interested in building their portfolios with stabilized, cash-flowing real estate inclusive of our Chick-fil-A leased assets,” said Patrick Luther, a managing principal with SRS Capital Markets. “As an investment, Chick-fil-A leased properties provide triple net buyers an opportunity to own a best-in-class asset with the strongest credit and highest average store sales of any brand in the drive-thru fast-food space.”

He added that SRS currently has 15 Chick-fil-A assets on the market valued at $85.5 million, including two in escrow. This also represents 30% market share of all Chick-fil-A stores up for sale.

According to Northmarq’s Single-Tenant Q1 2024 report, investment sales activity hit $11.2 billion, a 26% increase from the previous quarter. While the numbers reflect “a 4.5% decline compared to this time last year,” the Northmarq analysts note that the sector continues to perform consistently. “The first three months of 2024 put the market on a promising trajectory to surpass 2023’s total,” they added.

Investment sales volume by single-tenant asset type was as follows:

• Industrial — $4.03 billion

Cap Rate Increases

Northmarq reported that the average cap rate for the combined net-lease sector increased by 20 basis points (bps) to 6.5%. This represented “the highest average seen since mid-year 2015,” the analysts pointed out. While single-tenant office cap rates topped out at 6.81%, retail remained the lowest at 6.38%. Meanwhile, the industrial cap rate reached 6.55%, or 102 bps higher than the previous year.

“As buyers and sellers continue to adjust their pricing expectations in today’s market, further increases across all sectors should be expected as we move through 2024,” the analysts said.

Changes in Buyer Type

There’s also been a change in who’s buying these net lease properties.  During the past decade, private buyers have been prominent, making up between one-third and one-half of the activity in this sector. But during Q1 2024, public REITs became more active.

“With 36% of the overall single-tenant market, public REITs also dominated market share in the office and retail sectors,” the Northmarq report said. They weren’t as active on the industrial side, however. This doesn’t mean that private buyers are down and out, though.

Still, interest rates remain elevated. As a result, “some individual investors who aren’t being driven to act by a 1031 exchange might decide to rest on the sidelines for a little while longer,” Northmarq analysts said.