Fountain Valley, CA

SINGLE TENANT TACO BELL (FRANCHISEE) WITH DRIVE-THRU

LOCATION

41,000+ cars per day (cpd), hard corner, signalized property with 22,000 people in a one mile radius; 43,000 people within a five minute drive and an average household income of over $128,000/year. The major high school for the city is a quarter mile north of the property. The street fronting the property provides direct freeway access to area residents a half mile east of the property.

DEAL STORY

The Taco Bell franchisee, including its predecessor, had been operating at this location since the 1960’s and had only two years of total lease term remaining. The tenant was paying a very low lease rate, but a portion of the property was on a leased parcel of land that was a few years away from reverting to the ground lessor. During a short escrow period we negotiated an extension of the ground lease and, after close of escrow, we purchased the fee interest in that parcel of land. Although our original goal was to renegotiate the deal with the Taco Bell franchisee, we found a tenant willing to pay substantially more and who was committed to completing a total building renovation at their expense.

RESULT

The result for our investors is an increase in NOI of almost 500% with a tenant that is substantially stronger than the original franchisee and a completely renovated property with, what we believe, is future upside. The new tenant reported that the location is performing far above their expectations and has become their number one store at the time of this writing.