This Arby’s, located in Northwood (Toledo) OH presented Bedrock Investments Group (BIG) with the unique opportunity to acquire the building pad subject to an Arby’s corporate ground lease with 1 ½ years remaining on term. Arby’s has occupied this build-to-suit facility for nearly 20 years (1994). The acquisition cost of $137.00/sf is 70% below estimated replacement cost ($450.00/sf) with the current contracted rent approximately 48% below market. The pad is an out parcel to the Great Eastern Shopping Center (141,692 sf of shop space and approximately 40 acres of land) and is adjacent to a McDonald’s restaurant. Dollar General, Super Dollar Tree, Loan Max, Curves and Sally Beauty Supply are other tenants in the center. CA New Plan Acquisition Fund, LLC, the center’s owner, sold this pad to lower its basis and position the shopping center for redevelopment. In January 2015 and 2020, Arby’s extended the lease for an additional five (5) year term with a 15% rent increase. Renovations completed by Arby’s in November 2015 included new exterior, mansard roof replacement, interior refurbishment, painting the building and new monument and building signage.
Bedrock Investments Group (BIG) leased the former Jack In The Box to Bosa Donuts for ten (10) years at a monthly rental rate and periodic base rent increases consistent with current trade area market rents. Bosa performed a significant interior redevelopment with a new interior, kitchen, and roof at their cost. The site is located near the main entrance to Luke AFB, adjacent to McDonalds and near a major traffic intersection of Litchfield and Glendale avenues. This property was originally acquired by the seller in 1998 for $1,600,000.00. Prior to the lease expiration, Jack In The Box completed a series of capital improvements (CAPEX) to the property including sidewalk and parking lot repairs, building touch up, and water retention/runoff scale installation. The former owner sold due to immediate financial demands to settle an estate. This asset is a long term hold.
Arizona Sandwich Company signed a 10-year lease to operate on an outparcel to Motel 6. The base rent was $24.00/s.f. 24th street was an opportunistic acquisition by Bedrock Investments Group (BIG) partners and an investor. The building was a former Waffle House converted to office use for an engineering firm with a substantial SBA loan in 2007/2008. Wells Fargo Bank foreclosed on the property on September 15, 2011 following a write-down of the loan to $197,500.00. The property was marketed at $250,000.00 following foreclosure. Following an extensive market study, BIG principals determined that the building should rent for $19,656.00 annually ($1.00/sf/mo NNN). The lease-up period was anticipated to be 12-18 months. The building is located at the west end of the Sky Harbor International Airport runway on 24th Street, ½ mile from the car rental center and less than ¼ mile from the I-10 freeway and light rail. The parking area is significant with 20+ spaces or 1/81 sf of building area.
The asset was the last property held in a charitable remainder trust which the estate ordered Bank of America (trustee) to liquidate. The lease with a Burger King (BK) franchisee had less than 5 years remaining on the primary term at time of purchase. The purchase price was $425,000. This fast-food site is the only drive-thru in central Palm Springs and is situated on a Bureau of Indian Affairs ground lease that expires in 2041. The BK franchisee filed for bankruptcy and Bedrock recaptured the property.
The site was remodeled and leased to Castaneda’s Mexican food under the terms of a 25-year lease. The return to our investors is now over 9.0% with annual increases for the next 24-years. The investment strategy is to hold as a self-liquidating annuity. Castaneda’s Mexican food is a 27-unit family owned business that operates in San Diego, Riverside, San Bernardino, and Imperial counties in Southern California.
John Galardi opened his first hot dog stand, called Wienerschnitzel, in 1961. Galardi Group operates and franchises approximately 350 Wienerschnitzel retail locations, most co-branded with Tasty Freeze. The property was held in a partnership where one party passed and both estates chose to liquidate their holdings. The lease with the base rent at $36,000 per annum had expired prior to acquisition. BR Long Beach LLC negotiated a sales price based on the new annual net operating income (NOI). During the due diligence period, BR Long Beach LLC structured a 10-year renewal at $48,000 per annum plus annual increases based on an analysis of the gross the sales revenue over the past 5-years. The LLC acquired the site for cash within 45 days from the purchase contract execution. East Artesia Boulevard is a main thoroughfare and the 91 freeway exit is less than ¼ mile from the site. The tenant continued to pay percentage rent over most of the original lease term and recently extended their lease.