New Chipotle property in North Natomas sets record sale price of nearly $5 million
The North Natomas property where a new Chipotle Mexican Grill sits sold earlier this month for $4. 95 million, the highest price per square foot paid for any of the chain’s drive-thru locations that opened this year.
Sacramento brokerage firm, Hanley Group Real Estate Advisors, completed the sale of the 2,347-square-foot building on just over an an acre of land at 2650 Arena Blvd. in Natomas Crossing on Aug. 8, the same day that the property tenant, Chipotle, opened its doors for business.
“We procured multiple competitive offers and had plenty of backup interest once the buyer was in escrow,” said the group’s Executive Vice-President Bill Asher said.
The location visible from the Interstate 5 Arena Boulevard offramp and next to a planned Costco, all part of the Quad District mixed-use development, helped secure the strong price for the property.
Sacramento County property records show the seller of the Chipotle site was Chase Partners, a Southern California developer of retail stores, restaurants and industrial properties. The buyer was a Los Angeles area couple, Jose and Lilly Tan.
Chase had brought the unimproved land back in 2022 for $1.7 million, property records show.
Asher said Chipote had signed an initial 15-year lease. The rent was not disclosed.
Real estate observers agree the new Chipolte location is a testament to rising land values in a new upcoming area of Sacramento and a reminder of that old real estate mantra , “location, location, location” being a key driver of property values.
Will Austin, who is CoStar Group’s director of market analytics for Sacramento, said it makes sense that the sale of the Chipotle property received a high price.
“This is new construction at a highly visible intersection,” he said.
He said the buyer will be able to collect rent from Chipotle on a long-term lease and would likely be able to sell the land at a higher price.
What will Quad District become?
Austin said companies like Chipotle are willing to pay high rents for desirable locations, and the future opening of Costco will only enhance the desirability of the area.
The Chipotle and the 160,000-square-foot Costco, which is expected to start construction in the next few months, are part of a new area of North Natomas called the Quad District.
Ultimately, if all goes as planned, the Quad District will resemble a new city.
More than 2.4 million square feet of office space, one million square feet of retail, hotels, a new Kaiser Permanente Hospital, and more than 850,000 square feet of multifamily residential units are scheduled to be constructed over a period of years.
The area today is mostly vacant land, except for Chipotle and other recently opened businesses: a Chevron gas station, a Starbucks, a Wendy’s and Local Kitchens, a food hall.
However, the growth of North Natomas extends beyond the Quad District. Housing developments under construction line I-5m and the former Sleep Train Arena is being developed into a major new hospital and medical school.
Austin said companies like Chipotle see North Natomas as an area that is “under retailed,” even though it is growing.
“The value in Natomas right now is there is a lot of construction going on, a lot of people who are relocating from other parts of Sacramento,” he said.
