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Dutch Bros Coffee Ground Lease, Gallatin, TN

Dutch Bros Coffee Ground Lease

Gallatin, Tennessee

Price $2,052,000
Cap Rate 3.85%
NOI $79,000
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 2021
Building Size 950 SF
Lot Size 1.19 Acres (51,892 SF)
Status Available
Lead Broker Information Vincent Aicale
Executive Director
415.690.5522
vince.aicale@cushwake.com
CA RE License #01728696

Ryan Forsyth
Executive Director
415.413.3005
ryan.forsyth@cushwake.com
CA RE License #01716551

Michael T. Yuras, CCIM
Executive Managing Director
415.481.0788
michael.yuras@cushwake.com
CA RE License #01823291

Scott Crowle
Executive Director
415.604.4288
scott.crowle@cushwake.com
CA RE License #01318288

Investment Highlights

NEW 15-YEAR ABSOLUTE NNN GROUND LEASE WITH SCHEDULED RENTAL INCREASES TO STRONG RETAIL TENANT
» New 15-year ground lease with four (4) five (5) year options, creating a stable, long-term investment
» Absolute NNN lease requires zero landlord management, ideal for an out-of-area investor
» 10% rental increases every five years, providing a hedge against inflation
» Dutch Bros is a drive-thru coffee chain with a goal of adding more than 500 new sites by 2023
» Dutch Bros recently went public valued at over $3.8 billion (NYSE: “BROS”)
» Dutch Bros sales are up 51% through the first six (6) months of 2021 after a record performance in 2020

LOCATED IN AN EXTREMELY AFFLUENT AND GROWING TENNESSEE RETAIL CORRIDOR
» Excellent visibility and access to 25,785 vehicles per day on Nashville Pike
» Convenient access State Route 386 and Highway 109, which experiences a combined traffic count of 72,612 vehicles per day near the property
» Average annual household income of $112,481 within a one-mile radius of the location with a projected nine percent increase in the next five years
» 62,014 residents live within a five-mile radius of the site with a projected 12 percent increase by 2026, poising Dutch Bros and Gallatin for significant concurrent growth

CENTRAL LOCATION NEAR LARGE EMPLOYERS, RETAILERS, AND SCHOOLS
» Outparcel to Lowe’s Home Improvement Store, greatly increasing foot traffic to the location
» Surrounded by a strong mix of national retailers, including Walmart Supercenter, Publix, Walgreens, Subway, Jersey Mike’s Subs, Longhorn Steakhouse, Discount Tire, and many more
» Close proximity to Gap Inc. 2.8M SF distribution center that operates 24 hours per day with over 2,000 employees
» Minutes from Volunteer State Community College (9,227 students)
» One mile from Chandler Park Gallatin (336 units) and within walking distance to Stratford Apartments (120 units) and Fairview Commons Apartments (24 units), providing a stable customer base
» Proposed Vinewood Townhomes will add 50 townhomes to the immediate area

NEW 2021 CONSTRUCTION IN A TAX FREE STATE
» 2021 construction featuring a dedicated dual-lane drive-thru, providing additional customer convenience and boosting sales revenue
» Features latest store designs and concepts
» Tennessee has no income tax



Property Description

The property is centrally located with excellent visibility and access to 25,785 vehicles per day directly in front of the site on Nashville Pike. The site is an outparcel to major tenant Lowe’s Home Improvement Store, promoting crossover traffic. It is also in close proximity to a 2.8M SF Gap distribution facility that operates 24 hours per day and employs over 2,000 people. The property is located in a growing and extremely affluent area. The average household income is $112,481 within a one-mile radius of the location with a projected nine percent income growth within the next five years. 62,014 residents live within a five-mile radius of the site with a projected 12 percent increase within the next five years, poising Dutch Bros and Gallatin for significant concurrent growth.

The property benefits from access to State Route 386 and Highway 109, which experiences a combined traffic count of 72,612 vehicles per day near the site. Volunteer State Community College is located minutes from the property, which had an enrollment of 9,227 students during the Fall of 2020. Volunteer State Community is one of the largest employers in the Gallatin. The site is close to several large shopping centers and community hubs and is surrounded by a strong mix of local and national retailers, including Walmart Super Center, Publix, Walgreens, Subway, Jersey Mike’s Subs, Longhorn Steakhouse, Discount Tire, and many more. The property maintains beneficial proximity to Hilton Garden Inn Gallatin (102 guest rooms, 1,628 SF event space). Within walking distance to Stratford Apartments (120 units), Fairview Commons Apartments (24 units), and one mile from Chandler Park Gallatin (336 units), providing a stable customer base. The proposed Vinewood Townhomes new development (50 units) will also increase traffic to the site and is to be located behind Lowe’s.

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