Q&A Online Platforms: What Drove Starbucks NNN Deal in Georgia?

By Dennis Kaiser

Camille Renshaw is the CEO and founder of B+E (Brokers+Engineers), an online trading platform for buyers and sellers to conduct entire triple net lease (NNN) transactions online. Connect Media asked her to share how the platform works, and a recent interesting deal involving Starbucks that was completed on the system in our latest 3 CRE Q&A.

Q: What are some of the features of the trading platform, and how it can be used to efficiently close deals?
A: The B+E trading platform consists of user-friendly dashboards, real-time predictive pricing, and an AI-driven exchange – all leveraging the largest data set in the industry. Buyers and sellers can conduct entire Net Lease transactions online, reviewing real-time credit, news, and tenant data while they trade, much like online stock trading platforms.

Q: We understand you recently completed a deal involving a Starbucks-occupied asset near Atlanta on this platform. Please tell us what was unique about the property sale?
A: The property is located at 279 Perry Parkway in Perry, GA. It’s a roughly 1,800-square-foot building and on a 1.2-acre parcel that was sold for $900,000 at a 5.5% cap rate. The property was sold to a 1031 exchanger from California. B+E represented the seller, a Florida-based developer.

The unique aspect to this deal is that Starbucks has an original lease term of 10 years for this NNN property, but a right to terminate the lease after three years, at the tenant’s discretion. Leases with three years of term or less remaining are very unpopular among NNN buyers, making the assets difficult to sell. Starbucks experimented with these lease structures nationwide during the last three years, and developers have been unable to sell the short term into the market. To our knowledge, this is the first time one has been sold. The owners of other Starbucks with a similar three-year termination are fascinated that we were able to sell one at such a low cap rate.

Q: What were some of the reasons the deal was attractive to the buyer, and how did the deal come together?
A: It’s brand new, at Starbucks credit. They believe that Starbucks will be there for the full 10 years, and we structured deposits in such a way that that if they’re not, they’re in a really good financial position. Also rent per square foot is low. This property was developed to sell, and the buyer was on a 1031 exchange.

We sourced the deal through our proprietary technology. Again, the unique angle to the transaction is our selling the property for a 5.5% cap rate, despite the three-year termination clause.

For comments, questions or concerns, please contact Dennis Kaiser