Ground Lease Investment

Colliers is pleased to present the opportunity to acquire the fee simple interest in the land beneath the Regal Santiam 11, an 11-screen, ±40,069 SF movie theater on Lancaster Drive SE in Salem, Oregon. The property is subject to a long-term ground lease with New RCI Holdings, Inc., operating as Regal Cinemas, which has operated at this location since 1999. The current term runs through December
31, 2030, with three remaining 5-year extension options that would carry the lease through 2045. Extension rental increases are pegged at 15% at each option. Under the ground lease, the tenant is responsible for property taxes, insurance, and maintenance of the leased premises. Rental income consists of base rent of $223,944 annually, plus potential for percentage rent allocations.

The ground lease structure gives an investor a rare combination of income and residual value. Per the lease, the building and site improvements revert to the landlord upon expiration of tenancy. A buyer is acquiring not only a rent stream from a national operator, but also a reversionary interest in a fully built, multiscreen entertainment venue on ±6.37 acres. Regal's commitment to the site is also demonstrated: the tenant allowed the first extension term to take effect and confirmed the renewal in writing in July 2025. That renewal followed the company's 2023 emergence from restructuring when many of their non-performing locations were shed. Since then, the parent company has reported its strongest summer box office performance since 2018.

The property is well positioned along Lancaster Drive, one of Salem's primary retail corridors, with convenient access to Interstate 5 and traffic counts in excess of 17,000 vehicles per day. The surrounding trade area includes national retailers such as Home Depot, Walmart, WinCo Foods, Dick’s Sporting Goods and Lowe's, and shares an access road with CarMax. Salem is Oregon's capital and secondlargest
city, and its stable government, healthcare, and education employment base supports steady demand for entertainment and retail in the area.