Quick-Service Restaurants Remain Attractive for Net Lease Investors

Quick-Service Restaurants Remain Attractive for Net Lease Investors

The restaurant tenants tend to have leases that feature 10 percent rent escalations every five years or 2 percent rent escalations annually.

Steady investor demand has kept restaurant net lease cap rates in the low range during 2017. In the casual dining net lease sector, quick service restaurants (QSRs) are winning, even if by a photo finish.

Quick-Service Restaurants

Cap rates in the sector averaged 6.11 percent in the third quarter of 2017, tightening by just 8 basis points from 6.19 percent in the first quarter of the year, according to research from Northbrook, Ill.-based net lease brokerage firm The Boulder Group. Within that range, plenty of differentiation was happening between franchisee-backed and corporate-backed net lease properties. Although franchisee-owned dining properties experienced plenty of demand from investors, corporate-owned restaurants came in with tighter overall cap rates on completed deals.

National Real Estate Investor

More info at National Real Estate Investor:
Quick-Service Restaurants Remain Attractive for Net Lease Investors

 

 

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The Boulder Group is a boutique investment real estate service firm specializing in single tenant net lease properties. The firm provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, developers, REITs, partnerships and institutional investment funds./

Founded in 1997, the firm has arranged the acquisition and disposition of over $2.1 billion of single tenant net lease real estate transactions. In 2010-2014, the firm was ranked in the top 10 companies in the nation for single tenant retail transactions by Real Capital Analytics. The Boulder Group is headquartered in suburban Chicago

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Phone: 847-562-0003