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Texas Roadhouse Ground Lease, Weslaco, TX

Texas Roadhouse Ground Lease, Weslaco, TX


Investment Summary

Price $3,506,000
Cap Rate 4.85%
NOI $170,000
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 7,926 SF
Lot Size 2.214 acres (96,430 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 NOTABLE NATIONAL TENANT
» Texas Roadhouse (NASDAQ: “TXRH”) currently operates 710 locations in 49 states and 10 foreign countries
» Average unit volumes for Texas Roadhouse are above $7.6M for the first time
» 10% rental increases every five years in initial term and option periods, providing a hedge against inflation
» Requires zero landlord management, ideal for an out-of-area investor
» Purchase price well-below the overall capital investment of the tenant (average capital investment for a new store in 2022 was $7.8M)
» Texas Roadhouse annual revenue for 2022 was $4.015B, a 15.9% increase from 2021
» In Q2 2023, total revenue was $1.17M and average weekly sales at company restaurants were $146,727

ANCHOR TO A DEVELOPING SHOPPING & DINING CENTER
» Located just off the southwest corner of East Expressway 83 (20,227 AADT) and North Bridge Avenue
» Beneficial proximity to Interstate 2 (99,457 AADT)
» Anchor to the Shops at North Bridge and surrounded by tenants including Freddy’s Frozen Custard & Steakburgers, Cold Stone Creamery, ULTA, and more
» Strong retail corridor near major national brands such as Walmart Supercenter, H-E-B, Lowe’s Home Improvement, T.J. Maxx, Petco, and many others
» 2.5 miles from Knapp Medical Center (227 beds, 900 employees) and Weslaco Regional Rehabilitation Hospital (32 beds)

DENSELY POPULOUS BORDER CITY POISED FOR GROWTH
» Ideal location surrounded by well-attended schools, increasing lunch-time traffic to the site
» 1.4 miles from South Texas College – Mid-Valley Campus (31,000+ students, 2,200+ employees) and Weslaco High School (2,430 students) and near Donna High School (2,046 students)
» Surrounded by single-family housing developments and apartment complexes
» 110,287 residents within five miles of the property
» Average household income of $61,379 within a one-mile radius (projected 13% increase by 2028)
» 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 expected to be completed in early fall 2023
» New building, limiting near-term deferred maintenance or capital costs
» Texas has no state income tax, estate tax, or inheritance tax

Property Description

» Anchor to The Shops at N Bridge: Prominently located at 1 of 2 entrances to this developing retail center and surrounded by tenants such as Freddy’s Frozen Custard & Steakburgers, James Avery, Cold Stone Creamery, and ULTA, allowing for significant crossover shopping
» Beneficial Proximity to Major US Thoroughfares: Located at the southwest corner of North Frontage Road/East Expressway 83 (20,227 AADT) and Interstate 2 (99,457 AADT), significantly increasing traffic in the surrounded area
» Located In A Strong Retail Corridor: The property is near major national brands such as Walmart Supercenter, H-E-B, Lowe’s Home Improvement, T.J. Maxx, Petco, and many others
» Surrounded By Well-Attended Schools: 1.4 miles from South Texas College – Mid-Valley Campus (31,000+ students) and Weslaco High School (2,430 students) and near Donna High School (2,046 students), increasing lunchtime traffic to the site
» Advantageous Proximity to Residential Communities: Well-positioned in a growing border city and surrounded by high-density single-family housing developments and apartment complexes
» Densely Populated Area: 110,287 residents live within five miles of the property
» Access to Purchasing Power from A Metroplex: 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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