The Boulder Group, a net leased investment brokerage firm, completed the sale of a single tenant net leased Cheddar\u2019s Scratch Kitchen ground lease located at 1510 E IH 2 in Donna, Texas for $3,636,000. The new construction property is situated along the IH-2\/Expressway 83 corridor within the McAllen\u2013Edinburg\u2013Mission MSA.<\/p>\n
The Cheddar\u2019s Scratch Kitchen property at 1510 E IH 2 in Donna, Texas is positioned along the IH-2\/Expressway 83 corridor. The IH-2\/Expressway 83 corridor carries approximately 132,801 vehicles per day at the property\u2019s location. The property is part of the Shops at 493 power center, a 25-acre multi-phase development anchored by Walmart Supercenter. Co-tenants within the Shops at 493 include Burlington, Ross Dress for Less, dd\u2019s Discounts, Five Below, PetSmart, and Dollar Tree. Additional national retailers in the immediate trade area include H-E-B, The Home Depot, Hobby Lobby, Lowe\u2019s, T.J. Maxx, Ulta, Bath & Body Works, Chick-fil-A, Planet Fitness, and Dutch Bros. N D Salinas Boulevard, a key cross street, carries approximately 21,025 vehicles per day. The population within five miles of the Cheddar\u2019s Scratch Kitchen in Donna, Texas is approximately 129,394 residents. The average household income within one mile is approximately $71,011. Institutional demand drivers near the property include Donna ISD with more than 14,000 students, South Texas College with more than 34,000 students, and the University of Texas Rio Grande Valley with approximately 32,000 students and more than 4,454 faculty and staff. DHR Health, a major regional hospital with more than 500 beds and 3,000 employees, and Knapp Medical Center with 227 licensed beds are also nearby. The Donna\u2013R\u00edo Bravo International Bridge, which supports more than 3.5 million annual crossings, is undergoing a $100 million expansion to add commercial truck lanes and strengthen binational trade. The McAllen\u2013Edinburg\u2013Mission MSA is home to more than 1 million residents and generates more than $17 billion in annual retail sales. McAllen International Airport, located approximately 18 miles west of the property, handles more than 900,000 travelers annually.<\/p>\n
Randy Blankstein, Jimmy Goodman and John Feeney of The Boulder Group represented the buyer in the transaction. The seller was a Texas based real estate company. The buyer was a West Coast based private investor looking to purchase a single tenant net lease (STNL) asset in Texas.<\/p>\n
The lease at the Cheddar\u2019s Scratch Kitchen in Donna, Texas is structured as an absolute NNN ground lease. The initial lease term is 10 years. Rent commenced on September 8, 2025, and the lease expires in September\u00a0 2035, leaving approximately nine years of remaining term. The tenant has four 5-year renewal options. Rental escalations of 10% occur every five years throughout both the primary term and all renewal option periods. As an absolute NNN ground lease, the landlord has zero management responsibilities or capital expenditure obligations. Texas has no state income tax, providing an additional benefit to the property owner.<\/p>\n
Cheddar\u2019s Casual Caf\u00e9, Inc., operating as Cheddar\u2019s Scratch Kitchen, is a casual dining restaurant chain headquartered in Orlando, Florida as part of the Darden Restaurants portfolio. Founded in 1979, Cheddar\u2019s Scratch Kitchen operates nearly 185 locations across 29 states. The brand is known for preparing more than 90 percent of its menu items from scratch daily. Darden Restaurants, the parent company of Cheddar\u2019s Scratch Kitchen, also operates Olive Garden, LongHorn Steakhouse, and The Capital Grille, and generates approximately $12 billion in annual revenue. Darden Restaurants employs more than 200,000 people across its portfolio of brands. The parent company carries an investment-grade credit rating.<\/p>\n
\u201cInvestor demand for net leased casual dining properties backed by strong operators continues to strengthen as buyers seek dependable income streams in high-growth Texas markets,\u201d said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, \u201cThis new construction Cheddar\u2019s Scratch Kitchen ground lease attracted significant interest due to its positioning within the Shops at 493 power center alongside Walmart Supercenter and numerous national retailers along the heavily trafficked IH-2\/Expressway 83 corridor in Texas.\u201d John Feeney, Senior Vice President of The Boulder Group, noted, \u201cThe buyer was attracted to the passive, absolute NNN ground lease structure with zero landlord responsibilities, the built-in 10% rental escalations every five years, and the benefit of acquiring an income-producing asset in a no-income-tax state like Texas.\u201d<\/p>\n