Stan Johnson Company Sells Memphis, TN Hooters Location for Record Cap Rate
San Francisco, Calif. – Stan Johnson Company, one of the nation’s premier net lease brokerage firms, has completed the sale of a free-standing, 5,842-square-foot Hooters restaurant for a recent record cap rate. The property, located in Memphis, Tennessee, traded during fourth quarter 2017 for more than $3.9 million. The sale closed at a 5.25% cap rate, setting a new cap rate record for Hooters investments sold in the last two years across the U.S.
The restaurant was acquired by a high net worth individual based in California, and Stan Johnson Company’s team of Chris Lomuto and Milo Spector represented the seller, a developer.
“This property sold for a full asking price to an all-cash, California-based exchange buyer who was looking for a solid triple net investment. This is a great example of ongoing demand from exchange buyers looking for stable, passive investments in good locations,” said Milo Spector, Associate Director in Stan Johnson Company’s San Francisco office. “Another great thing about this transaction is that we were able to put this property under contract and start due diligence before construction was complete. This is very important to a lot of our developer clients as the proceeds from these sales can be reinvested into their next project.”
The restaurant has a new 20-year, absolute triple net lease in place, which was guaranteed by Hooters corporate. The location is modeled after the company’s new 2017 prototype design, which features multiple TVs and a much more open design. It is an outparcel to both Walmart and Sam’s Club, and is located just blocks from the FedEx world headquarters.
“We were very pleased with the result,” added Chris Lomuto, Associate Director in Stan Johnson Company’s San Francisco office. “Although, considering the quality of the underlying real estate combined with the corporate credit, the results weren’t entirely surprising.”
Lomuto further commented that “the Hooters brand, while currently being reinvented, has demonstrated remarkable brand equity over the years.”
The property was previously a Ruby Tuesday restaurant, but was sold vacant by the operator during a recent restructuring initiative.
“This really shows how important it is to assess the quality of the real estate when purchasing a triple net investment,” said Spector. “This conversion and interest in the site from Hooters corporate shows just how much demand there is for quality sites from operators. This largely has to do with the limited supply of strong real estate locations that are currently available. It’s not as easy as it used to be to get a hard corner or an outparcel location.”
About Stan Johnson Company:
Stan Johnson Company is one of the nation’s leading commercial real estate brokerage and advisory firms that focuses exclusively on net lease transactions involving retail, office, industrial, healthcare and sale leaseback properties. The firm provides acquisition, disposition, capital markets and advisory services for institutions, developers, investment funds and private investors across the United States. Now in its fourth decade of service as a trusted advisor to its valued clients, Stan Johnson Company has completed more than $30 billion in transactions nationwide and is regarded as the Net Lease Authority®. To learn more about Stan Johnson Company, please visit the recently enhanced website at www.stanjohnsonco.com.