Hanley Investment Group and Oaks Commercial Real Estate Arrange Sale of Single-Tenant McDonald’s Drive-Thru on Costco Outparcel in Orange County, Calif., for $3.85 Million

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Hanley Investment Group and Oaks Commercial Real Estate Arrange Sale of Single-Tenant McDonald’s Drive-Thru on Costco Outparcel in Orange County, Calif., for $3.85 Million

Hanley Investment Group and Oaks Commercial Real Estate Arrange Sale of Single-Tenant McDonald's Drive-Thru on Costco Outparcel in Orange County, Calif., for $3.85 Million

FOUNTAIN VALLEY, Calif. – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, in conjunction with Oaks Commercial Real Estate, announced today that the two firms arranged the sale of a single-tenant property occupied by a McDonald’s Drive-Thru in Fountain Valley, California. The sale price was $3.85 million for the absolute triple-net ground lease, representing a 3.55% cap rate.

Hanley Investment Group’s 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% cap pricing and secured a local all-cash, 1031 exchange buyer who resides minutes from the property,” Asher said. “With seven years remaining on an initial 20-year lease term, we achieved record pricing for a McDonald’s with 5% 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,” said 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% 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, reports Asher.

Chicago-based McDonald’s (NYSE: MCD; S&P: BBB+) is the world’s leading global foodservice retailer, operating over 40,000 locations across 100 countries. Approximately 95% of McDonald’s restaurants worldwide are owned and operated by independent local business owners. McDonald’s announced its most recent quarterly earnings data on April 30, 2024. The company had revenue of $6.17 billion for the quarter, an increase of 4.6% year-over-year. McDonald’s U.S. same-store sales grew by 2.5%.

The Fountain Valley market, located in Orange County, is a dense, infill trade area with formidable barriers to entry. With over 686,000 residents and 330,755 employees supporting the five-mile trade area, the average household income within a one-mile radius stands at $135,000.

Asher remarked, “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.”

About Oaks Commercial Real Estate 

With over 45 years in retail real estate, both at the corporate and brokerage levels, Fred Encinas has represented some of the industry’s top companies. His career began as a facility engineering assistant for Market Basket, a division of the Kroger Company. His hard work led him to management positions at Chief Auto Parts, Round Table Pizza, McDonald’s, In-N-Out Burger, and EZ Lube. He also served as a senior vice president at NAI Capital, Inc. Currently, Fred is the broker/owner of Oaks Commercial Real Estate. He has represented many retail food clients in Southern California and continues to expand his client base throughout the Los Angeles, Orange County, and Inland Empire markets. See www.oakscre.com.

About Hanley Investment Group 

Hanley Investment Group Real Estate Advisors is a real estate brokerage and advisory services company with over an $11 billion transaction track record that specializes in the sale of retail properties nationwide. Our expertise, proven track record, and unwavering dedication to putting clients’ needs first set us apart in the industry. Hanley Investment Group creates value by delivering exceptional results through the use of property-specific marketing strategies, cutting-edge technology, and local market knowledge. Our nationwide relationships with investors, developers, institutions, franchisees, brokers, and 1031 exchange buyers are unparalleled in the industry, translating into maximum exposure and pricing for each property. With unmatched service, Hanley Investment Group has redefined the experience of selling retail investment properties. For more information, visit www.hanleyinvestment.com.  

Media Contact
Company Name: Hanley Investment Group Real Estate Advisors
Contact Person: Bill Asher, Executive Vice President
Email: Send Email
Phone: 949.585.7684
Address:3500 East Coast Highway, Suite 100
City: Corona del Mar
State: California
Country: United States
Website: https://hanleyinvestmentgroup.com/