3650 Rio Road

Highlights:

• In-Place Rent & Residual Value Protection: Current rent is below market for this premier coastal location, offering a strong margin of safety and residual value protection. A replacement tenant could likely be secured at or above the current rate if ever needed.
• Dominant Retail Synergy & Access: Located in The Crossroads Carmel Shopping Center, benefiting from synergy with major anchors including Safeway, CVS, Ace Hardware, Bank of America, and popular restaurants. Ample parking ensures easy access for locals and tourists—critical for high-volume coffee sales.
• Affluent Coastal Town Demographics: Carmel-by-the-Sea boasts a median household income of $213,365, significantly exceeding the national average.
• Prime Retail Hub Location: Positioned on a hard corner at Rio Road and Cabrillo Highway (Highway 1)—the main north-south coastal route and gateway to the Monterey Peninsula.
• Surrounding Retail Synergy: Integrated within The Crossroads Carmel Shopping Center, a dominant retail hub anchored by Safeway, driving consistent traffic throughout the trade area.
• New Multifamily Development Adjacent: A 34-unit luxury multifamily property is under construction directly across Rio Road, adding density and a future customer base.
• Exceptional Land & Residential Value Growth: Land values in Carmel rank among the highest in the region, and residential home prices have seen substantial appreciation over the past five years, reinforcing market strength.

Description:

Full Corporate Guarantee
The lease is backed by the full corporate credit of Starbucks Corporation, providing investors with an investment-grade income stream and minimizing risk of default.

Long-Term Tenant Commitment
Starbucks has operated at this location since 2012 (13+ years) and recently executed a five (5)-year lease extension, leaving seven (7) years of total term remaining. This demonstrates strong performance and willingness to remain long-term.

New Store Format
Starbucks plans a major reinvestment and remodel in 2027 at the start of its option period, converting the store to the modern “Cafe-Style” prototype. This aligns with CEO Brian Niccol’s “Back to Starbucks” strategy, which emphasizes the Third Place experience—no drive-thru, cozier seating, longer customer visits, and local community design.

Irreplaceable Location & Affluent Market
Strategically located just off California Highway 1 within The Crossroads Carmel, the area’s dominant shopping center. The location draws from an affluent local population and heavy tourist traffic from Monterey Beach, Pebble Beach, Spyglass Hill, and other world-class attractions.

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