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Chick-fil-A Ground Lease, Conroe, TX

Chick-fil-A Ground Lease, Conroe, TX


Investment Summary

Price $3,247,000
Cap Rate 3.85%
NOI $125,000
Lease Term 15 years
Lease Type Absolute NNN ground lease, with tenant responsible for all taxes, insurance, and maintenance, including roof, structure, and parking lot
Rental Increases 10% rental increases every five (5) years
Year Built 2024
Building Size 2,656 SF
Lot Size 1.29 acres (56,268 SF)
Status Available
Lead Brokers Michael T. Yuras, CCIM
Vice Chairman
415.481.0788
michael.yuras@cushwake.com
CA RE License #01823291

Jack Hinson
Brokerage
704.572.9921
j.hinson@cushwake.com
CA RE License #02059267

Scott Crowle
Executive Managing Director
415.604.4288
scott.crowle@cushwake.com
CA RE License #01318288

Vincent Aicale
Vice Chairman
415.690.5522
vince.aicale@cushwake.com
CA RE License #01728696

Ryan Forsyth
Vice Chairman
415.413.3005
ryan.forsyth@cushwake.com
CA RE License #01716551

Investment Highlights

NEW 15-YEAR ABSOLUTE NNN CORPORATE GROUND LEASE
» New 15-year absolute NNN corporate ground lease with 10% rental increases every five (5) years
» Ten (10) option periods of five (5) years each, providing an excellent long-term investment opportunity with the largest chicken chain in the U.S. with over 2,900 units
» Chick-fil-A generated $18.8B in U.S. system sales in 2022, up approximately 13% from 2021
» The highest-volume stand-alone location in 2022 generated approximately $17M and the lowest volume generated $2.2M with drive-thru locations averaging more than $8.5M per unit
» Chick-fil-A restaurants average more than $8M in sales annually among non-mall locations

STRATEGIC LOCATION IN THE FASTEST GROWING CITY IN THE U.S.
» Strong five-mile average household income of $98,400, and expected to grow 17%+ by 2028
» Strategically located near the signalized four-way intersection of Cartwright Road and North Frazier Street (combined 42,512 AADT)
» Excellent proximity to Interstate 45, which connects the cities of Dallas and Houston (171,708 AADT)
» Conroe was recently identified as the fastest-growing city in the U.S. with an annual growth rate of 7.8%, 11 times the national average
» Surrounded by dense housing developments, including The Woodland Hills (4,500+ homes) and Graystone Hills (780 homes)
» Beneficial proximity to Conroe Park North, a 1,655-acre industrial park tenanted by major employers such as National Oilwell Varco (1,047 combined employees) and MS Energy Services (1,000 employees)
» Nearby major medical hospitals include St. Lukes Woodland Hospital, Houston Methodist Hospital, Texas Children’s Hospital, and Kelsey-Seybold Clinic establishing the community with a top-tier workforce and 24-hour demand for tenants near the establishments
» Limited housing supply in The Woodlands is driving a significant push for housing growth east of Interstate 45

2024 CONSTRUCTION BUILT TO LATEST CHICK-FIL-A PROTOTYPE
» New high-quality 2024 construction built to latest Chick-fil-A prototype
» Site features a dual-lane drive-thru and ample parking on a large 1.29-acre parcel, providing a significant additional revenue stream and added customer convenience

Property Description

» This Chick-fil-A is located strategically near the signalized four-way intersection of Cartwright Road and North Frazier Street (combined 42,512 AADT)
» The property maintains excellent proximity to Interstate 45, which connects the cities of Dallas and Houston, continuing southeast from Houston to Galveston over the Galveston Causeway to the Gulf of Mexico (171,708 AADT)
» The location is surrounded by dense housing developments, including The Woodland Hills (4,500+ homes) and Graystone Hills (780 homes)
» 93,037 residents live within a five-mile radius of the property, an increase of 51% since 2010 and is projected to increase 13% over the next five years, illustrating Conroe’s recent and explosive growth
» The property is also supported by an affluent customer base, with an average annual household income of $98,400 within five miles of the property
» Conroe was recently identified as the fastest-growing city in the U.S. with an annual growth rate of 7.8%, 11 times the national average

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