DENVER, CO – [November 21, 2019] – Blue West Capital has completed the sale of a single tenant net leased Kneaders Bakery and Café property located at 13482 Bass Pro Drive, Colorado Springs, CO for $2,925,000. This is the second Kneaders Bakery & Café that Blue West Capital has sold in less than two weeks; recently selling a Kneaders in Parker, CO earlier this month. The Colorado Springs property sold for a 5.12% cap rate, representing the lowest cap rate ever sold for a single tenant Kneaders Bakery and Café nationally, according to CoStar.
Tom Ethington and Zach Wright represented the seller in the Kneaders transaction; a California-based private investor. The purchaser was a Colorado-based 1031 exchange investor.
The 4,050 square foot Kneaders property opened in 2016 and is on a long-term absolute triple net lease. The lease features 10% rental increases every five years. Kneaders is a privately held company based in Orem, UT with over 60 locations. They are a fast-casual restaurant chain that serves freshly baked breads, sandwiches, homemade pastries, hearty soups, and refreshing salads.
The property is strategically positioned at the signalized entrance to Polaris Pointe, a 2+ million square foot mixed-use development in Colorado Springs’ expanding north corridor. The Kneaders is just east of Interstate 25 and positioned in the immediate proximity to the U.S. Air Force Academy. The surrounding area is affluent with average annual household incomes in excess of $145,000 within a five-mile radius.
“Single tenant restaurants with strong underlying real estate are highly sought after amongst 1031 exchange investors. Buyers have been aggressively pursuing these properties creating favorable market conditions for sellers,” said Zach Wright, Director of Net Lease Investment Sales. “The seller approached us with the idea of selling her single tenant investment in Colorado Springs and moving the equity closer to her home in San Francisco via a 1031 exchange. This is the 5th Kneader’s transaction we have worked on. We were excited to find the right buyer quickly and advise the family throughout the process,” added Tom Ethington, Managing Partner.