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Olive Garden Ground Lease, San Juan, TX

Olive Garden Ground Lease, San Juan, TX


Investment Summary

Price $2,686,000
Cap Rate 5.40%
NOI $145,000
Lease Term 10 years
Lease Type Absolute NNN ground lease, with tenant responsible for all taxes, insurance, and maintenance, including roof and structure
Rental Increases 10% rental increases every five (5) years
Year Built 2023
Building Size +/- 7,818 SF
Lot Size 1.73 acres (75,359 SF)
Status Available
Lead Brokers Ryan Forsyth
Vice Chairman
415.413.3005
ryan.forsyth@cushwake.com
CA RE License #01716551

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

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

ABSOLUTE NNN GROUND LEASE WITH SCHEDULED RENTAL INCREASES
» Long-term NNN ground lease with no landlord responsibilities
» 10% rental increases every five years, providing a steady and reliable income stream
» Corporate lease to Olive Garden, the largest chain of Italian-themed restaurants in the nation
» Olive Garden is owned by Darden Restaurants (NYSE: “DRI), rated “BBB” by S&P

HIGH-TRAFFIC LOCATION IN PRIMARY RETAIL CORRIDOR
» Purchase price well-below the tenant’s total capital investment for a new store. For Fiscal Year ’22, the average total tenant capital investment for a new Olive Garden was $4.45M
» Prime location with frontage to Expressway 83 and visibility from Interstate 2 (combined 138,000+ vehicles per day)
» Less than 4 miles from North Interstate Highway 69C arterial (81,466 AADT)
» Adjacent to Acura and Audi to the east and next to newly constructed Starbucks and Chili’s
» Other major national tenants nearby include Walmart Supercenter, H-E-B, Bank of America, Gamestop, Wingstop, Jack-in-the-Box, Dollar Tree, Popeyes, and many others
» Rio Grande Valley historically has some of the highest store-level sales for casual dining assets in the country

DENSELY POPULATED SOUTH CENTRAL TEXAS COMMUNITY POISED FOR CONTINUOUS GROWTH
» 175,326 residents within a five-mile radius (20% increase since 2010)
» Average annual household income expected to increase approx. 15% over the next five years
» Projected population and income increase within 1-, 3-, and 5-mile radii over the next five years poise Olive Garden and San Juan for steady concurrent growth
» The area is home to a number of colleges and universities, including the University of Texas Rio Grande Valley (31,940 students) and South Texas College (28,233 students)

NEW 2023 CONSTRUCTION IN A TAX-FREE STATE
» New 2023 construction built to the latest Olive Garden restaurant prototype
» Texas has no personal income tax or corporate income tax

Property Description

» Excellent Location: Prime location with frontage to Expressway 83 and visibility from Interstate 2 (combined 138,000+ vehicles per day) and less than 4 miles from North Interstate Hwy 69C arterial (81,466 AADT)
» Home to a Variety of Attractions: San Juan is home to the Alamo Dance Hall, Mercadome Flea Market, Bentsen-Rio Grande Valley State Park, Santa Ana National Wildlife Refuge, City Music Ballroom Hacienda, and Basilica of Our Lady of San Juan del Valle, which attracts over 1 million visitors each year. It is the second most visited shrine in the United States after the National Shrine of the Immaculate Conception in Washington, D.C.
» Ideal Nearby Customer Base: The area is home to a number of colleges and universities, including the University of Texas Rio Grande Valley (31,940 students) and South Texas College (28,233 students)
» Strong Demographics: 175,326 residents within a 5-mile radius (20% increase since 2010) with an average annual household income expected to increase approx. 15% over the next five years

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