Dutch Bros Coffee Secures Long-Term Lease for New Build-to-Suit Location in Round Rock, Texas
Dutch Bros Coffee (NYSE: BROS) continues its impressive expansion with the signing of a brand new build-to-suit lease agreement for a prime location in Round Rock, Texas. With BB Holdings TX, LLC, operating as Dutch Bros Coffee, and guaranteed by Boersma Bros. LLC, this 15-year lease offers an enticing investment opportunity. The property’s strategic location, coupled with the company’s exponential growth and the lease terms, make it an attractive proposition for investors. This article explores the details of this exciting development and outlines the potential returns it offers.
Situated at 2630 S A.W. Grimes Boulevard in Round Rock, Texas, the property occupies approximately 0.8034 acres or 35,000 square feet. The retail restaurant building, spanning 950 square feet, is purpose-built for Dutch Bros Coffee and features a double drive-thru component. Ample parking is available on-site, ensuring convenience for customers.
The lease agreement is with BB Holdings TX, LLC, doing business as Dutch Bros Coffee, and is guaranteed by Boersma Bros. LLC. It spans 15 years, with three five-year options to renew. The current annual rent is $125,000, subject to a 10% increase every five years and at the start of each option period. The lease is net, making the tenant responsible for all taxes, insurance, and maintenance expenses.
Priced at $2,778,000, this property offers an attractive return on investment. The projected returns over the course of the lease term are as follows:
- Years 1-5: $125,000 at a 4.50% return
- Years 6-10: $137,500 at a 4.95% return
- Years 11-15: $151,250 at a 5.44% return
- Years 16-20 (Option 1): $166,375 at a 5.99% return
- Years 21-25 (Option 2): $183,013 at a 6.59% return
- Years 26-30 (Option 3): $201,314
The incremental rental escalations and the tenant’s strong corporate guarantee contribute to the potential for stable and increasing returns over the investment horizon.
The Dutch Bros Coffee build-to-suit lease in Round Rock, Texas, presents a compelling investment opportunity. With a prime location, purpose-built facilities, and a long-term lease agreement guaranteed by Boersma Bros. LLC, investors can expect stable returns over the 15-year term and potential extensions. Dutch Bros Coffee’s remarkable growth and success in the industry, combined with the robust real estate market in Round Rock, further enhance the appeal of this investment. With a projected return on investment ranging from 4.50% to 6.59%, this property is poised to deliver both financial stability and potential capital appreciation.
For more information on this commercial real estate deals or others on the market, get in touch with Yi Meggie Mei at (512) 298-1899 or email mei@realinternational.com.
