Starbucks | 15-Year Corporate Lease
New 15-Year Corporate Lease | Near Costco Business Center
Marketing description
Starbucks Corporation signed a 15-year net lease commencing October 2025, offering a stable income stream through October 2040.
Tenant handles all taxes, insurance, and maintenance (excluding roof, structure, and parking lot), minimizing landlord responsibilities.
Starbucks, a Fortune 500 company, operates over 16,000 U.S. locations, ensuring a creditworthy tenant.
Positioned on Watt Ave with 49,354 AADT, just 0.14 miles from Cottage Way, driving high visibility.
Adjacent to Costco Business Center (0.5 miles), a traffic magnet with bulk retail appeal.
Surrounded by dense retail including Target, Home Depot, and Arden Fair Mall (two miles, 1M+ annual visitors).
Strong traffic synergy from nearby El Camino Ave (21,191 AADT), amplifying customer flow.
Investment highlights
Prime Retail Location: Situated on Watt Ave, this property benefits from 49,354 daily vehicles and proximity to Costco (0.5 miles). The site lies along a bustling corridor with major retailers like Target and Home Depot within one mile. Its visibility and accessibility make it a standout investment in Sacramento’s retail landscape.
Net Lease Structure: Starbucks Corporation’s 15-year net lease, starting June 2025, shifts all taxes, insurance, and maintenance (except roof, structure, and parking lot) to the tenant. This structure delivers a hassle-free $180,000 NOI at a 4.50% cap rate for the landlord. Rental escalations of 10% every five years project NOI to $318,881 by 2040, enhancing long-term yield.
Robust Demographics: The property serves 379,580 residents within five miles, with a median household income of $75,476, rising to $85,500 by 2029. Average household income within one mile reaches $109,086, the highest among the radii, signaling strong consumer spending potential. Population growth of 13% since 2010 underscores the area’s expanding demand base.
Modern Construction: Completed in 2025, this 2,200 SF building on a 0.84-acre lot features Starbucks’ latest design with a high-efficiency drive-thru. The construction quality minimizes future capital expenditures for the landlord, aligning with the net lease terms. Its compact footprint maximizes land use efficiency in a high-traffic zone.
Traffic and Accessibility: Watt Ave’s 49,354 AADT (0.14 miles away) and El Camino Ave’s 16,110–21,191 AADT (0.31–0.34 miles) ensure consistent exposure. The site’s signalized intersection proximity enhances ingress/egress for drive-thru customers. This connectivity supports Starbucks’ 22.5% visitation rate within five miles.
Investment Upside: Priced at $4,000,000 with a 4.50% cap rate, the property offers immediate cash flow and growth potential via scheduled rent bumps. Starbucks’ credit strength and the site’s location near a Costco Business Center bolster its stability. The five-mile radius’s 267,596 fast-food visitors in six months reinforce its revenue potential.
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