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Dutch Bros Ground Lease, Weslaco, TX

Dutch Bros Ground Lease, Weslaco, TX


Investment Summary

Price $1,510,000
Cap Rate 5.50%
NOI $83,000
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 2023
Building Size 871 SF
Lot Size 0.77 acres (33,715 SF)
Status Available
Lead Brokers 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

Michael T. Yuras, CCIM
Vice Chairman
415.481.0788
michael.yuras@cushwake.com
CA RE License #01823291

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

Investment Highlights

NEW 15-YEAR ABSOLUTE NNN GROUND LEASE TO STRONG RETAIL TENANT
» New 15-year absolute NNN ground lease with a strong corporate guaranty
» 10% rental increases every five years
» Requires zero landlord management, ideal for an out-of-area investor
» Dutch Bros (NYSE: “BROS”) went public in 2021 – now valued at over $6.4 billion
» Dutch Bros Inc. is one of the fastest-growing brands in the food service and restaurant industry in the U.S. by location count with 671 locations across 14 states
» Only Dutch Bros location within an 18-mile radius, providing limited competition

PRIME LOCATION OUTPARCEL TO AN H-E-B AND NEAR MAJOR AREA EMPLOYERS
» Outparcel to an H-E-B store and H-E-B Weslaco Retail Support Center, a major employer in Weslaco
» High-visibility location on North Westgate Drive with direct access to 18,830 vehicles per day
» Beneficial proximity to well trafficked thoroughfares, US Highway 83 Business (17,600 AADT) and Interstate 2 (106,575 AADT)
» Ideal location in a strong retail corridor near major national brands such as The Home Depot, Office Depot, Walgreens, Planet Fitness, Chick-fil-A, Raising Cane’s, and many others
» Walking distance to Weslaco High School (2,430 students) and South Texas College – Mid Valley Campus (28,000 total students, 214 employees), providing a nearby ideal customer base
» 2.5 miles from Knapp Medical Center (227 beds, 900 employees) and Weslaco Regional Rehabilitation Hospital

POPULOUS BORDER CITY POISED FOR GROWTH
» Surrounded by single-family housing developments and apartment complexes
» 104,325 residents within five miles of the property (12% growth since 2010)
» Average household income of $67,709 within a one-mile radius (projected 18% increase by 2027)
» The City of Weslaco has maintained a credit rating of “AA” from Standard and Poor’s, and “A2” by Moody’s
» Location provides access to purchasing power from the Reynosa-McAllen metroplex
(population 1.5 million), South Texas region, and affluent northern Mexican markets

NEW 2023 CONSTRUCTION IN TAX-FREE STATE
» High-quality 2023 construction featuring a dedicated dual-lane drive-thru, providing additional customer convenience and boosting sales revenue
» New building, limiting near-term deferred maintenance or capital costs
» Texas has no state income tax, estate tax, or inheritance tax

Property Description

» This Dutch Bros is located prominently along North Westgate Drive with excellent visibility and access to 18,830 vehicles per day
» The site maintains beneficial proximity to U.S. Highway 83 Business (17,600 AADT) and Interstate 2 (106,575 AADT), increasing traffic significantly in the surrounded area
» The property is an outparcel to an H-E-B store and H-E-B Weslaco Retail Support Center, a major employer in Weslaco
» Ideally located in a strong retail corridor, the site is situated near major national brands such as The Home Depot, Office Depot, Walgreens, Planet Fitness, Chick-fil-A, Raising Cane’s, and many others
» The property is within walking distance to Weslaco High School (2,430 students) and South Texas College – Mid Valley Campus (28,000 total students, 214 employees), an ideal nearby customer base
» The site is situated 2.5 miles from Knapp Medical Center (227 beds, 900 employees) and Weslaco Regional Rehabilitation Hospital
» The property is well-positioned in a growing border city and immediately surrounded by single-family housing developments and apartment complexes
» 104,325 residents live within five miles of the property
» The location provides access to purchasing power from the Reynosa-McAllen metroplex (population 1.5 million), the South Texas region, and affluent northern Mexican markets

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