
Hanley Investment Group and Oaks Commercial Real Estate have brokered the sale of a single-tenant property occupied by a McDonald’s Drive-Thru in the City of Fountain Valley, Orange County, California.
The sale price was US $3.85 million for the absolute triple-net ground lease, representing a 3.55 per cent cap rate.
Hanley Investment Group Executive Vice Presidents Bill Asher and Jeff Lefko, in association with Fred Encinas of Oaks Commercial Real Estate of Eastvale, California, represented the seller – a family trust based in Newport Beach, California. The buyer, an all-cash, 1031 exchange buyer based in Fountain Valley, was represented by Robert Tran of HPT Realty in Westminster, California.
“We generated multiple qualified offers at sub-4 per cent cap pricing and secured a local all-cash, 1031 exchange buyer who resides minutes from the property,” says Asher. “With seven years remaining on an initial 20-year lease term, we achieved record pricing for a McDonald’s with 5 per cent increases every five years and a shorter-term lease.”
Built in 2011 on 1.04 acres, the 3,500-square-foot McDonald’s is located at 11321 Talbert Avenue – an outparcel adjacent to a top-performing Costco. The property benefits from its proximity to the signalized, hard-corner intersection of Talbert Avenue and Newhope Street, with an average daily traffic count exceeding 45,000 cars. It is conveniently located less than a half-mile north of the on/off-ramps for Interstate 405, one of the busiest roadways in the country, averaging 320,000 cars per day.
“A recent interior store remodel reinforced McDonald’s continuing commitment to this location,” adds Encinas. “The combination of below-market, long-term sustainable rent, the recent remodel, and prime location positioned at the signalized entrance to the shopping center made the asset exceptionally appealing to the buyer.”
The subject property is one of the top-performing McDonald’s locations nationwide (according to Placer.ai) and is strategically positioned as an outparcel to a Costco-anchored shopping center. This Costco is within the top 10 per cent performing Costco locations nationwide (per Placer.ai). Other top-performing national/credit tenants at the shopping center, according to Placer.ai, include PetSmart (top 1% nationwide), Ross Dress for Less (top 30% nationwide), Taco Bell (top 30% nationwide), Starbucks, and more, promoting crossover synergy within the center.
“Investors seeking stable returns often turn to single-tenant triple-net properties leased to strong credit tenants, like McDonald’s. These assets, particularly when occupied by nationally recognized brands with long-term leases, offer a blend of reliable income and minimal management responsibilities. Despite market fluctuations, such investments provide a flight to quality in uncertain times and will continue to be the types of single-tenant retail investments that trade more frequently in today’s market,” Asher concludes.