525 W Napa St, Sonoma, CA 95476

Being offered on an unpriced basis, 525 West Napa Street in Sonoma, California, is a single-tenant, net-leased investment leased to Duggan’s Mission Chapel, the base term of which expires in December 2028 with two 5-year options to extend. At $0.70 per sq. ft. monthly, the current base rent is at least forty percent below prevailing retail lease rates in this submarket of Sonoma. Additionally, the two percent biennial increases equate to one percent increases annually, also well below industry standards.

The sellers may obtain the approval of the United States Bankruptcy Court to avoid the existing below-market lease with Duggan's Mission Chapel and sell 525 West Napa Street free and clear of such lease. Accordingly, interested buyers are encouraged to submit bids assuming either (a) the property is sold free and clear of any existing leases or (b) the current lease is amended to be in line with current market rates.

525 West Napa Street is approximately 9,572 square feet of gross building area, with 15 on-site parking spaces. Two doublewide curb cuts allow for easy ingress/egress, with an additional double-wide driveway onto Studley Street immediately to the south of the subject property, parallel to West Napa Street. The subject property enjoys high-identity, illuminated signage on West Napa directly in front of the building improvements. A portico-style entry is on the east façade of the building.

The property is located on the “soft corner” at the dynamic intersection of 5th Street West and West Napa Street. A testament to the incredible vehicular traffic count at this intersection, the pedestrian walkways at each of the four corners are monitored for safety in every direction. Neighboring retailers on the three corners opposite 525 West Napa Street are Safeway, a flagship Wells Fargo branch, and Sonoma Valley Center, anchored by Sonoma Market, and Redwood Credit Union.

This is a rare offering indeed. For the add-value investor, acquiring this well-located asset with exposure to a tremendous traffic count and the possibility of bringing the income stream to market is uncommon in this infill, barriers-to-entry submarket. For owner-users, this location represents the opportunity to acquire a flagship site for business operations with ample on-site parking. Finally, for the arms-length investor seeking a bond-like investment, in the event the lease cannot be terminated, underwriting a lower than market return at acquisition is offset by the confidence that tremendous increases in base rent are on the horizon.