RealSource Group Completes Landmark Transaction: Pilot Flying J Travel Center Sale Sets New Records

Connect CRE – 3/28/2024

NEWPORT BEACH, Calif. – RealSource Group, a national commercial real estate brokerage company specializing in investment sales, sale-leasebacks and tenant representation, announced today that the firm completed a landmark transaction — the sale of a single-tenant property occupied Pilot Flying J Travel Center in Jurupa Valley, located in the northwest corner of Riverside County, California. The sale, which closed at $14 million, has set new records nationwide for both the highest sales price and price per square for a Pilot ground lease. Additionally, the closing cap rate of 4.90% establishes an all-time low for a Pilot ground lease located outside of Texas.

RealSource Group’s Senior Vice President of Investment Sales Austin Blodgett and Associate Jonathan Schiffer represented the seller, Greens Group, based in Irvine, California. Blodgett and Schiffer also represented the buyer, a private investor from Irvine, California.

“This sale represents a notable milestone, setting nationwide benchmarks for a Pilot ground lease,” remarked Blodgett. “The acquisition also marked the buyer’s first net-lease purchase. The buyer was particularly drawn to the property’s underlying real estate value and the unique security offered by the Pilot brand, now wholly owned by Berkshire Hathaway under the leadership of Warren Buffett, further bolstering the buyer’s confidence in the investment.”

Blodgett continues, “RealSource brought tremendous value to the deal by fielding hundreds of interested buyers and walking investors through the real estate value with real area land comps, future potential upside with zoning regulations and rental comps validating that Pilot J was paying considerably below-market rent.”

Schiffer adds, “We calculated that the land alone could potentially fetch upwards of $30 million based on recent comps. As the property is tied to a lease with Pilot for the next 35 years (assuming all options are exercised), this long-term, covered land play offered investors a steady cash flow with future potential for up-side.” Greens Group sold the asset to recycle the proceeds into more aligned assets, according to Blodgett.

Pilot Flying J’s absolute triple-net ground lease relieves the buyer of any landlord responsibilities. “Corporate-backed absolute ground leases are popular among investors, seeking simplicity in their holdings. Pilot Flying J has more than 14 years remaining on the initial lease term with four five-year options and 10% rental increases every five years,” Blodgett noted.
Pilot Flying J Travel Center is strategically located off State Route 60 (SR 60) with 185,000 cars per day and Interstate 15 with 155,000 cars per day, the main thoroughfare connecting the Inland Empire to surrounding cities. Built in 2019, Pilot Flying J operates a 15,500-square-foot travel center and fuel lanes on a sizeable 11.50-acre parcel at 11053 Riverside Drive. Pilot Flying J has a large freeway-visible 50-foot pylon sign and sits at two hard corners (each exceeding 40,000 cars per day) at 11053 Riverside Drive in Jurupa Valley (formerly Mira Loma), which offers excellent ingress and egress with multiple entrances and exits for trucks and standard vehicles.

According to Blodgett, the property benefits from multiple income streams, including 12 fueling lanes, a drive-thru Wendy’s, Cinnabon, PJ Fresh Marketplace convenience store, a Western Union, 107 truck parking spots plus 48 reserved parking spots, two ATMs, CAT-certified scales and nine on-site showers. The Pilot Flying J Travel Center is the only large format, full-service truck stop in the trade area and is a popular stop for truckers, commuters and travelers along Interstate 15 and SR 60, Blodgett noted.

As the largest network of travel centers, Pilot Travel Centers LLC has more than 870 Pilot, Flying J and One9 locations in 44 states and six Canadian provinces, serving an average of 1.3 million guests per day. In addition to travel center services, Pilot Travel Centers LLC offers trucking fleets a variety of solutions for fuel, credit, factoring, maintenance and rewards. The company operates the third largest fuel tanker fleet in North America and supplies approximately 14 billion gallons of fuel per year. Pilot Travel Centers LLC is committed to shaping the future of energy as the largest provider of biodiesel and renewable fuels and through the development of a coast-to-coast EV charging network and low carbon fueling alternatives. 

In early March 2024, Pilot Travel Centers LLC announced plans to add 35 travel centers and remodel more than 75 locations across its network. It is also expanding its truck maintenance network of Southern Tire Mart at Pilot Flying J (STMP) shops. Last year, the company opened 10 new travel centers and welcomed more than 20 dealer locations to its network.

Pilot Flying J is 10 minutes from Ontario International Airport (ONT) and one hour from Palm Springs International Airport (PSP), John Wayne Airport (SNA) and Los Angeles International Airport (LAX).

RealSource Group, founded in 1991, is a national commercial real estate brokerage company that specializes in tenant representation, investment sales and sale-leaseback transactions. With the combination of RealSource’s leasing and sales experience, vast broker network, technology, unique processes, and national reach; RealSource delivers consistency, high production, quality service and measurable deal-making results for its clients on a nationwide platform. RealSource transacted nearly 1,000 commercial real estate deals nationwide, RealSource has perfected its platform through proven execution over the last 30 years.

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