Pegasus Sells Seasoned Starbucks Drive-Thru Locations

Pegasus, a national commercial real estate advisory and asset management firm, has successfully brokered the sale of two seasoned Starbucks drive-thru locations, marking a significant move in the net lease real estate market. The sale, which reflects investor demand for well-placed net lease assets with proven operating histories, involves the disposal of two drive-thru locations in Greensboro, North Carolina, and Peoria, Illinois.

Pegasus, which has served as both the exclusive advisor and asset manager for the ownership group, executed a strategic pre-marketing plan that included negotiating lease extensions with Starbucks. This move ensured that the assets would reach the market with the longest possible remaining term, while also addressing near-term capital requirements through planned roof and parking-lot improvements. The strategy reflects Pegasus' belief that the disposition process begins well before an asset formally comes to market.

The assets, which have more than 20 years of continuous operating history as Starbucks locations, were sold to Castle Bay Management Services, a diversified, multi-generational real estate acquisition and management firm based in New York. Castle Bay, which operates retail properties across 10 states, closed the acquisition within the originally allotted timeframe, adding the two Starbucks locations to its growing portfolio of quick service restaurant (QSR) properties.

Castle Bay's acquisition of these assets is part of its third and fourth completed transactions of 2026, as the company continues to expand its portfolio and acquisition platform.

The sale of these assets comes against the backdrop of a significant repricing in the single-tenant Starbucks sector. At the peak of the cycle, net leased Starbucks drive-thrus commanded cap rates as low as 4%. However, rising interest rates, an influx of new construction inventory, and investor resistance to the double-net lease structure have made buyers increasingly selective, particularly when evaluating assets with shorter lease terms or underlying real estate fundamentals that could present greater residual risk.

Both Pegasus and Castle Bay are already evaluating additional opportunities to work together, indicating a strong partnership and potential for future collaborations in the net lease real estate market.