Sales Price: $3,297,760
Cap Rate: 5.85%
Guarantor: Hielan Restaurant Group, LP (Franchisee: 43 units)
Term Remaining: 20 years
Rate Increases: 10% x 5 years
Closing on a fast-casual dining tenant during COVID came with its own set of challenges. Still, strong investment fundamentals allowed us to overcome immediate unease. This location offered significant operating history with a seasoned franchisee whose financials and unit level sales reflected a low probability of tenant default. The property is out-parcel to a major mall in the trade area, and nearby tenants include Chick-fil-a, Starbucks, McDonalds, Ross, Walmart and many other national brands. This was a sale-leaseback in which the tenant entered into a new twenty (20) year, absolute triple net lease with 10% increases every five (5) years and three (3) 5-year options to renew.
- Sub-6% rent-to-sales ratio with several million in cash reserves and 40+ locations under operation. Property situated on 1-acre parcel and has operated as a Chilis since it was built in 1995. +130K population density in a 5-mile radius and average household incomes of around $80K, which is well above the national average. 6-month rent credit to buyer at close of escrow for added peace of mind.