HARRISONBURG, VA—A New McDonald’s here has traded for $1.3 million, highlighting the ongoing demand for investment-credit net lease assets. The lease has a twenty-year term and features 10% rental escalations every five years. The new building is located on East Market Street less than a half mile from Interstate 81. Across the street is Valley Mall, which is anchored by JCPenney, Belk, Dick’s Sporting Goods, and Target.
Randy Blankstein and Jimmy Goodman of The Boulder Group represented the buyer and the seller in the transaction. The buyer was a trust in a 1031 exchange and the seller was a Southeast-based development company.
“The market for ground leases with investment grade tenants remains strong as investors are attracted to the typical long term leases with rental escalations,” says Randy Blankstein, president of The Boulder Group. This lease falls in a sweet spot of the net lease market in another way as well-investment grade tenanted properties with long term leases under $2 million dollars.