Marietta GA

Burger King restaurant, with a drive-thru, on short-term lease

Location

Average daily traffic count of 41,000 + cars per day. Population studies show over 10,000 people in a 1-mile radius: 21,000 people within a 5-minute drive and an average household income over $113,000 per year.  The trade area has been improving over time and there is significant evidence that the adjacent shopping center will undergo a major redevelopment in the foreseeable future. The thoroughfare fronting the property provides direct access to major roads and freeways for area residents.

Deal Story

The property had been occupied by a small Burger King franchisee for over 20 years and there was three (3) years remaining on the lease term, at time of acquisition. The tenant had no remaining options to extend the term and sales were below average for a Burger King. Our analysis revealed that it was unlikely the tenant would renew the lease as the property had not been remodeled for many years.  Our market study concluded that the average daily traffic flow combined with the desirable residential density and income levels would make this an attractive location for another quality QSR tenant so, KJF Partners proceeded with the acquisition of this well-located property.

Result

The result for our investors is that we secured an “as-is” lease with the largest franchisee of Freddy’s Steakburgers after the existing tenant  vacated the premises.  The tenant built a new building with no Landlord contribution for improvements.  At the time this writing, investors are receiving a 7.5% unleveraged cash/cash return (while we are building reserves) and, we  the return will increase to an approximate 9.5% unleveraged cash/cash return, after reserve levels are achieved.  In addition, investors have achieved a 91% increase in their equity investment. The future business plan for this property is to continue to hold the asset and provide growing distributions to investors.