Dutch Bros Coffee - Kroger Outparcel
Kroger Outparcel | Close Proximity to Indiana University - Kokomo
Marketing description
Porthaven Partners is pleased to present the opportunity to acquire a long-term absolute NNN investment occupied by Dutch Bros Coffee, located at 2903 S Washington Street in Kokomo, Indiana.
The Property consists of a newly constructed 950-square-foot Dutch Bros Coffee drive-thru situated on approximately 0.67 acres along South Washington Street, one of Kokomo's primary north-south commercial corridors. Dutch Bros opened and commenced rent in November 2025 and is committed through the initial 15-year base term, with 10% rental increases every five years and three 5-year renewal options. The lease is structured as an absolute NNN lease with zero landlord responsibilities, providing passive ownership and stable long-term cash flow.
The Property is positioned immediately adjacent to the Maplecrest Plaza Kroger, the nation's dominant grocer with pharmacy, pickup, and fuel center operations. The site also benefits from proximity to Indiana University Kokomo, located approximately 0.6 miles north on South Washington Street, with 3,127 students and approximately 680 employees, creating recurring student, faculty, staff, and commuter traffic along the corridor.
The surrounding trade area is further supported by nearby healthcare demand from Community Howard Regional Health, a short-term acute care hospital located approximately 1.0-1.2 miles southeast of the Property. The hospital includes approximately 111 staffed beds and offers 24/7 emergency care, advanced surgery, obstetrics, a Level 2 NICU, full-spectrum imaging, and the region's most advanced interventional heart program, reinforcing its role as a meaningful regional healthcare draw.
Investment highlights
- Long-Term Absolute NNN Lease - Tenant is operating under a 15-year absolute NNN lease with zero landlord responsibilities. The Lease offers long-term passive cash flow to investors and is significantly more attractive than competing coffee concepts with shorter 10-year lease structures.
- Strong Contractual Rent Increases - The Lease includes 10% rental increases every 5 years. Given the 15-year term, there are two scheduled rental increases in the base lease term, which provides a superior boost to yield and hedge against inflation compared to competing QSRs with a shorter lease.
- Dutch Bros - High-Growth Drive-Thru Coffee Operator - Dutch Bros Coffee is operated by Boersma Bros, LLC and backed by Dutch Bros Inc. (NYSE: BROS), one of the fastest-growing drive-thru coffee operators in the U.S. The company operates 1,181 locations across 25 states, with 32,000+ employees and $1.64 billion in revenue (up 27.9% YoY). EBITDA increased 31.4% to $157.4 million and net income increased 76.3% to $117.3 million, supporting continued national expansion and strong brand momentum.
- Newer Construction w/ Double Drive Thru - The Property features Dutch Bros' modern drive-thru prototype, designed to serve high customer volumes quickly and efficiently. The format is particularly well suited for South Washington Street's mix of grocery, university, healthcare, residential, and commuter-oriented traffic.
- Kroger-Anchored Daily-Needs Traffic - The Property is positioned immediately adjacent to Maplecrest Plaza a 286K+ square foot Kroger Anchored shopping center. The Kroger is full service and features a pharmacy, fuel center, and pickup operations. Kroger creates consistent weekly customer traffic and supports repeat-trip beverage demand directly adjacent to the Dutch Bros site. Other retailers in the center include Rural King, Anytime Fitness, Rent-A-Center, Wendy's, Smoothie King, and Wingstop. The Property is also located near McDonald's, Dominos, Burger King, and O'Reilly Auto Parts.
- Nearby Regional Healthcare Demand Driver - Community Howard Regional Health is located approximately 1.0 southeast of the Property and operates as a short-term acute care hospital with approximately 111 staffed beds. The facility offers 24/7 emergency care, advanced surgical care, obstetrics, Level 2 NICU services, imaging, and interventional heart care, including two cardiac cath labs and around-the-clock chest-pain / heart-attack treatment.
- Limited Local Competition - The closest national drive-thru coffee concepts are located along Reed Road / Markland, with Starbucks at 1401 S Reed Road and 7 Brew at 807 S Reed Road approximately 2.5-3.0 miles northeast of the Property. This gives Dutch Bros a differentiated national brand position within the Kroger / IU Kokomo / Community Howard south Kokomo trade area
- Major Employment Growth from StarPlus Energy - The StarPlus Energy joint venture between Stellantis and Samsung SDI is investing more than $5.7 billion in two lithium-ion battery plants in Kokomo, with the Indiana Business Research Center citing total investment above $6.3 billion and approximately 2,800 new jobs. While the plants are approximately 7-8 miles northwest of the Property, they are a meaningful market-level economic driver supporting employment, wage growth, housing demand, and consumer spending.
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