Pegasus sells two Starbucks drive-thru sites for $4.1 million

Pegasus Investments Real Estate Advisory closed the sale of a two-property Starbucks drive-thru portfolio in Greensboro, North Carolina, and Peoria, Illinois, for about $4.1 million. The deal highlights continued investor appetite for seasoned net lease assets even as the Starbucks sector has been repricing.

Why it matters: - The sale shows buyers still want well-located, income-producing net lease assets with long operating histories. - The transaction also shows how higher borrowing costs are pushing some owners to sell and redeploy capital outside real estate. - The deal adds another data point to a softer Starbucks net lease market, where investors are more selective than they were at the cycle peak.

What happened: - Pegasus Investments Real Estate Advisory sold a two-property portfolio of single-tenant Starbucks drive-thru locations in Greensboro, North Carolina, and Peoria, Illinois. - The portfolio sold for about $4.1 million at a 6.44% blended cap rate. - The properties went from launch to close in under 60 days. - Castle Bay Management Services bought the assets and closed all cash within the originally allotted timeframe. - Castle Bay said the purchase expands its growing portfolio of quick-service restaurant assets.

The details: - The seller was a long-term private owner that acquired the properties a little more than a decade ago. - The owner chose to sell after the debt tied to the portfolio matured. - A materially higher cost of capital in the current rate environment weighed on cash flow and helped drive the decision to exit. - Pegasus served as the exclusive disposition adviser and also managed the assets during the hold period. - Pegasus negotiated lease extensions with Starbucks before marketing the portfolio. - Pegasus also lined up planned roof and parking-lot improvements to reduce near-term capital needs. - Both stores have more than 20 years of continuous operating history as Starbucks locations. - The renewed leases gave buyers a longer remaining term and more evidence of tenant commitment. - Castle Bay Management Services is a diversified real estate acquisition and management firm based in New York. - Castle Bay acquires, owns and operates retail properties across 10 states. - The purchase marked Castle Bay's third and fourth completed transactions of 2026.

Between the lines: - Starbucks drive-thrus once traded at cap rates as low as 4% at the market peak. - Rising interest rates, new construction supply, investor resistance to Starbucks' typical double-net lease structure and announced store closures have made buyers more selective. - Pegasus CEO David Chasin said the two assets stand out because they have decades of sales history, replaceable rent and investment-grade credit behind the lease. - That profile looks different from a new build in an untested trade area, where residual risk can be harder to underwrite. - The result suggests seasoned locations with durable cash flow can still clear the market even as weaker Starbucks assets face more scrutiny.

What's next: - Pegasus and Castle Bay are already evaluating additional opportunities to work together. - Castle Bay is expected to keep expanding its retail and quick-service restaurant holdings. - The Starbucks sector will likely remain closely watched as investors test pricing against higher rates and lease-risk concerns.

The bottom line: - In a softer Starbucks market, age, location and lease durability still matter, and investors are paying for those traits when the real estate underwrites cleanly.