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McDonald’s Ground Lease, Magnolia, TX (Houston MSA)

McDonald’s Ground Lease, Magnolia, TX (Houston MSA)


Investment Summary

Price $2,715,000
Cap Rate 3.50%
NOI $95,000
Lease Term 20 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 4,300 SF
Lot Size 1.08 acres (47,044 SF)
Status Available
Lead Brokers Scott Crowle
Executive Managing Director
415.604.4288
scott.crowle@cushwake.com
CA RE License #01318288

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

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 20-YEAR ABSOLUTE NNN GROUND LEASE TO INVESTMENT-GRADE TENANT
» New 20-year absolute NNN ground lease with rare 10% rental increases every five years in initial term and option periods
» Absolute NNN ground lease requires no landlord management, ideal for an out-of-area investor
» McDonald’s (NYSE: “MCD”) is the world’s largest chain of hamburger fast food restaurants, serving over 69 million customers daily in 120 countries across 39,198 outlets
» McDonald’s is an investment grade tenant, with a “BBB+” credit rating from Standard & Poor’s and a “Baa1” credit rating from Moody’s

OUTPARCEL TO A NEW MAJOR NATIONAL HOME IMPROVEMENT STORE-ANCHORED RETAIL CENTER
» Located at the hard signalized intersection and main entrance to a new national home improvement store-anchored center (most prominent pad in the entire center)
» Adjacent to Magnolia Place, a new H-E-B-anchored mixed-use development with multi-tenant strips, a Chase Bank, several future pads, and 500+-unit multi-family residential communities under development
» Surrounded by several major national brand tenants including CVS, Chase Bank, Wendy’s, Taco Bell, Sherwin-Williams, Salad and Go, 7 Brew Coffee, » T-Mobile, Crust Pizza and many others
» Walking distance to the newly constructed Allora Magnolia (342-unit luxury apartment community) and Magnolia High School (2,151 students), providing a built-in customer base
» Close proximity to residential developments such as Mostyn Manor Reserve (residential community spanning 301 acres) and Magnolia Place (multi-family residential community with 500+ units)

HIGHLY AFFLUENT AND RAPIDLY GROWING TRADE AREA WITH EXCELLENT DEMOGRAPHICS
» Excellent annual household income of $181,884 within a one-mile radius and $163,112 within a ten-mile radius of the property
» Surrounded by dense housing developments, including The Woodland Hills (4,500+ homes)
» Limited housing supply in The Woodlands is driving a significant push for housing growth near Interstate 45
» The population of Magnolia has grown by a staggering rate of 48% since 2020
» Projected population and income increases within 1-, 3-, and 5-mile radii over the next three years poise McDonald’s and Magnolia for steady concurrent growth
» Gateway to Downtown Houston, the urban core of Greater Houston serving 2.28 million people

NEW 2024 CONSTRUCTION IN A TAX-FREE STATE
» New 2024 construction built to latest McDonald’s prototype
» Site features a dual-lane drive-thru for added customer convenience
» Texas is an income tax-free state

Property Description

» Near Major Traffic Drivers: The property is located across the street from a H-E-B-anchored retail center, and it maintains beneficial proximity to Magnolia High School (2,151 students) as well as the neighboring residential communities like Allora Magnolia (342 units) and Mostyn Manor Reserve
» Excellent Location: Highly visible and easily accessible location at the signalized intersection of Heritage Lane and Farm-to-Market Road 1488 (18,462 AADT) with multiple entry points into the property
» Outparcel to Brand-New Retail Center: This McDonald’s is positioned within Magnolia Village Shopping Center, Magnolia’s newest retail hub anchored by a new national home improvement store
» Affluent Area: The average annual household income within a 1-mile radius of this McDonald’s is $181,884 (projected 10%increase by 2028)
» Ideal Nearby Customer Base: 35,528 residents living within a 5-mile radius of this site, providing an ideal customer base
» Rapidly Growing Community: Magnolia is currently growing at a rate of 10.3% annually and its population has increased by 47.97% since the most recent census, which recorded a population of 2,389 in 2020

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