SRS’s National Net Lease Group completed the sale of three Burger Kings with drive-through properties on Florida’s eastern coast totaling $6.87 million in what they called a record-setting sale. One of the burger chain’s outlets is in Titusville and two are on Merritt Island.
“SRS NNLG received premium pricing on these Burger King properties due to our national marketing efforts, and targeting out of state investors. All of the respective buyers were located outside of Florida,” SRS National Net Lease Group Managing Principal Matthew Mousavi tells GlobeSt.com. ”Also, these properties featured new 15-year terms, and were backed by a large operator. For these reasons, coupled with the quality of the sites themselves, we received multiple offers from a national buyer pool.”
SRS’ National Net Lease Group Managing Principals Matthew Mousavi and Patrick Luther represented the seller, a Texas-based investment company. The buyers were three separate out-of-state private investors. The cap rates, which were in the low 4 percent range, represented the lowest caps rate ever for Burger King-occupied properties in the state of Florida and the lowest cap rate for any Burger King sold in the last 18 months, according to SRS.
Wide Range of Buyer Offers
“The Florida Burger King portfolio is one of several assignments our SRS National Net Lease Group is executing nationally on behalf of larger portfolio owners,” said Mousavi. “In this case, these assets were part of a multi-state, multi-brand portfolio, and received significant interest and a wide range of offers. At a blended cap rate in the 4 percent range, and an average price of $2.29 million, we were able to achieve premium pricing for these franchisee-guaranteed quick service restaurants.”
“These three locations all enjoy a strong consumer draw and crossover traffic resulting from their dense infill locations and proximity to a significant amount of nearby retailers and restaurants,” said Luther. “With zero landlord responsibilities, these assets provide a passive investment with Burger King, a long-term high-performing tenant.”
The three properties all share highly visible locations, are easily accessed and have undergone remodeling.
The highest priced property was at 11 S. Washington Avenue in Titusville. Built in 2002 and remodeled in 2014, the outlet is a 3,632-square-foot property that sold for $2.93 million and includes approximately 43 parking spaces. Its site is near the signalized intersection of S. Washington Avenue and Garden Street.
Burger King recently signed new 15-year absolute triple-net leases at each location.
The buyers plan to hold the assets for the long term.