Redondo Beach, CA – March 2019, Centers Business Management (CBM) completes a new leasing transaction with Chick-A-Fila in a former Burger King Drive-Thru location on busy Artesia Boulevard in prime Redondo Beach.
CBM leasing agent, Kelly Harrison, recently completed a ground lease transaction, representing the landlord in a deal Chick-Fil-A fast food restaurant. Situated on a seven-acre parcel, the site is currently occupied by a Burger King drive-thru location. The well-located property is on the major signalized intersection of Artesia Boulevard and Aviation Way in prime Redondo Beach, a thriving South Bay area retail hub. In addition to the physical restaurant, the sizable lot will also host a large parking area. Stationed along a bustling retail corridor, adjacent businesses sharing the intersection include a pre-school, School of Rock (children’s music school) franchise location, and a Pep Boys automotive supply store.
Chick-Fil-A was founded in 1946 in College Park, George, when the company is still headquartered. The thriving restaurant chain operates 2,200 locations nationwide, which includes over 100 stores throughout greater California. With plans to open additional locations across the US and Canada, Chick-Fil-A is currently in heavy expansion mode. In fact, the fast-food giant has publicly stated its aim to become the 3rd largest restaurant chain by 2020.
“The deal involved buying out [the lease on] an existing Burger King [drive-thru location],” says CBM leasing agent, Kelly Harrison. With heavy restaurant saturation and land for suitable sites scarce in Southern California “repurposing existing restaurant sites” is often the best, if not only option, Harrison adds. Harrison also notes the “lengthy and costly entitlement process, paired with the high construction costs” present further barriers to restaurant development deals. As such, there is no start date for principle construction or stated plans for the new location’s grand opening date.
“Restaurants continue to be the most active retail segment. But this deal demonstrates two of the biggest challenges food-users, even well-capitalized, creditworthy organizations face: Land scarcity and high development costs,” says CBM President, Rick Rivera. “A+ sites are few and far between, which is why investors swarm every new opportunity like blood-thirsty sharks,” Rivera remarks on the circumstances that continue to inflate land prices. Rivera also points out, “Chick-Fil-A is making an enormous investment in this project,” adding “they’re on the hook for the Burger King lease-buyout, entitlement fees, architectural and construction expenditures, and carrying costs. And that’s all before they earn a single dime on the deal.” The reason you only see “top-tier credit tenants on Main + Main intersections” is that, as Rivera states, such enterprises require “deep pockets.”
For more information about CBM and their retail leasing and property management services, please contact: Rick Rivera 310.575.1517 x201 | email@example.com.