McDonalds Outparcel to Victoria Gardens

Investment Overview

Progressive Real Estate Partners is pleased to present the opportunity to acquire the leased-fee interest in an irreplaceable McDonald’s outparcel to Victoria Gardens, secured by a corporate ground lease with McDonald’s USA, LLC, an investment-grade tenant rated BBB+ by S&P and Baa1 by Moody's. The property is positioned at Rancho Cucamonga’s ±1.2 million SF premier lifestyle destination, home to 160 retailers and restaurants and 14M+ visitors annually. The investment offers 9 years of remaining lease term, 10% rent increases every five years, and current annual ground rent of $163,350, substantially below estimated $300,000+ market rent, creating embedded rental upside, intrinsic real estate value, and downside protection. The site benefits from ±65,000 CPD on Foothill Boulevard and ±194,260 CPD on I-15, with average household incomes exceeding $144,000 within 3 and 5 miles.

Investment Highlights

• Corporate Lease – lease signed by McDonald’s USA, LLC, providing investors with the strength and stability of one of the world’s largest and most recognized quick service restaurant brands.
• Investment-Grade Credit | S&P: BBB+ | Moody’s: Baa1 – McDonald’s maintains investment-grade credit ratings, providing institutional-quality corporate credit backing the lease.
• Publicly Traded Company | Transparent Financial Reporting – McDonald’s Corporation is publicly traded on the New York Stock Exchange (NYSE: MCD), providing investors access to publicly available financial information, including annual and quarterly reports filed with the U.S. Securities and Exchange Commission.
• Below-Market Ground Rent | Downside Protection – current annual ground rent of $163,350 is below market, with comparable market rent for the site estimated at $300,000+ annually, creating significant upside potential over time while also offering long-term downside protection.
• Established Operating History – McDonald's has operated at the property since 2014, demonstrating more than a decade of continuous commitment to this location.
• ±9 Years of Primary Lease Term Remaining – The primary lease term runs through June 21, 2035, followed by eight additional five-year extension options.
• 10% Rent Increases Every Five Years – scheduled rental increases throughout the lease term, with the next 10% increase in April 2030.
• Outparcel to Victoria Gardens – a ±1.2 million SF open-air super-regional lifestyle center featuring approximately 160 retailers and restaurants, including Rolex, Chanel, Apple, Pottery Barn, Zara, Anthropologie, Williams-Sonoma, Free People, The Cheesecake Factory, Mendocino Farms, Flemings Steakhouse, Sweetgreen and more.
• 14+ Million Annual Visitors at Victoria Gardens – premier regional shopping and entertainment destination and the 5th busiest open-air lifestyle center in the nation, attracting more than 14 million annual visitors (Placer.ai).
• High-Traffic Historic Route 66 Frontage | ±65,000 CPD – property fronts Foothill Boulevard (Historic Route 66) at Day Creek Boulevard, benefiting from approximately 65,000 cars per day.
• Immediate I-15 Freeway Access | ±194,260 CPD – positioned near the Foothill Boulevard exit of Interstate 15, offering convenient regional access and exposure along one of Southern California’s major transportation corridors.
• $400M+ I-15 Corridor Infrastructure Investment – positioned at the northern end of the ±8-mile I-15 Corridor Freight & Express Lanes Project, adding new Express Lanes, auxiliary lanes and operational improvements designed to increase capacity and improve regional mobility.
• Dense National Retail Corridor – surrounded by a concentration of national retailers and restaurants including Walmart, Best Buy, REI, Chick-fil-A, In-N-Out, Panda Express, Fogo de Chão, LongHorn Steakhouse, Total Wine & More, BevMo!, Starbucks and more.
• Trade Area Demographics – Rancho Cucamonga is one of the Inland Empire's largest communities, with approximately 175,000 residents citywide and an average household income of approximately $148,000. The immediate trade area is similarly affluent with approximately 113,638 residents with an average household income of $145,004 within 3 miles, expanding to 278,546 residents averaging $144,320 within 5 miles.
• 385 New Residences at Victoria Gardens – Alexan at Victoria Gardens is a new four-story, 385-unit multifamily community currently under construction, further integrating residential density directly into the Victoria Gardens district. Anticipated completion in September 2027.
• Thousands of Additional Residential Units Planned – Rancho Cucamonga continues to see residential investment. The City's FY2025–26 budget identified 248 units under construction, 2,506 approved/expected to begin construction, and 3,042 units moving through entitlement.
• Continued Mixed-Use Development Along Foothill Boulevard – the City continues to encourage higher-density residential and mixed-use development. Harvest at Terra Vista at Foothill and Milliken is entitled for 671 apartments and 20,841 SF of commercial space.
• Major Employment & Commercial Investment – new investment includes the 60,000 SF Vallarta Supermarkets and Reyes Coca-Cola Bottling’s new ±620,000 SF production and distribution facility, supporting employment and economic growth.