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June 15, 2024
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NoCal Single-Tenant Asset Trades for $525/sf


A Honolulu, Hawaii-based investor has purchased a new construction, single-tenant net-leased retail property occupied by The Learning Center at the Lucky supermarket-anchored shopping center the Solano County city of Vacaville. The 10k sf property traded for $5.25 mil, or $525/sf.

Constructed in 2020, the building sits on 1.83 acres at 1959 Peabody Rd, at the intersection of Peabody and Alamo Drive, with traffic counts exceeding 44,000 cars per day. The building’s developer and seller was Armstrong Development Properties Inc, of Butler, PA.

Other major national tenants in the area include Burger King, Chevron, Little Caesar’s Pizza, O’Reilly Auto Parts, Subway, Taco Bell, Walgreens and Wells Fargo. The property is conveniently located 1.5 miles from Interstate 80, which connects suburban Vacaville to Downtown Sacramento and San Francisco, and allows nearby residents to easily drop kids off at The Learning Center on their way to work.

Vacaville is located halfway between Sacramento and San Francisco and is within minutes of Napa and Sonoma Wine Country. It is only a 40-minute drive to downtown Sacramento and Sacramento International Airport (SMF), and a one-hour drive to San Francisco.

Jeff Lefko and Bill Asher with Hanley Investment Group Real Estate Advisors represented the seller in the deal. The buyer was repped by Donald Yang of Advocate Realty Group of Irvine.

“The Learning Experience is the fastest-growing childcare franchise in the nation with over 450 centers open or under development. Due to the high demand for childcare in the U.S., the company is currently on a trajectory to open 75 to 100 centers per year,” said Lefko.

The Learning Experience, an educational childcare company, was named one of the “Best of the Best” in Franchise Business Review’s 2021’s Top 200 Franchises. The Learning Experience was also ranked among the top franchises in Entrepreneur Magazine's Franchise 500 for 2022, including No. 4 in the Child Services category. Entrepreneur's Franchise 500 is the world's first, best and most comprehensive franchise ranking.

According to Lefko, “Single-tenant net-leased properties occupied by a childcare or learning center like The Learning Center have experienced a cap rate compression of 25 to 50 basis points. But, they still offer a relatively attractive return for investors that need to get positive leverage. Investors can typically achieve around a 6% cap rate depending on the location and length of the lease term.”

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