Tenant Description

Chick-fil-A, Inc. is the largest fast food chicken chain in the United States, based on domestic annual sales. Characterizred by award-winning restaurant designs and architecture, the family-owned, privately-held company is strategically expanding and uniquely positioned for continued future growth. Chick-fil-A is nationally recognized as having strong franchised restaurant operators as demonstrated by a franchisee turnover rate of less than 5% per year and a franchissee acceptance rate of less than 0.4% per year. Chick-fil-A NNN leases have a corporate guarantee by Chick-fil-A, Inc; making them highlhy desirable to net lease investors nationally. When purchasing a Chick-fil-A ground-leased property, investors are buying the real estate upon which the Chick-fil-A restaurant is located. These ground-leased properties provide significant investment security given the nature of the real estate investment diligence conducted by Chick-fil-A’s real estate team, which generally pays for the design, construction, and equipment for all new stores. From a real estate fundamentals perspective, knowing that store locations and developments are chosen based on corporate goals for target markets; it is not surprising that new stores are typically located in high-traffic community epicenters and are often found as outparcel/pad sites at major shopping centers. The first Chick-fil-A restaurant opened in 1967 and now boasts over 2,100 locations in 46 states and Washington, DC.

PROSCONS
  • Industry-leading investment-grade credit
  • Compressed cap rates due to high investor demand
  • Rental escalations in base term
  • Generally high rental rates PSF that could prove hard to replace in the event 7-Eleven vacates
  • Low price point relative to similarly strong investment-grade tenants
  • Investor unable to depreciate improvements in ground-leased locations
  • Predominantly Absolute to Modified NNN ground leases with zero to limited landlord responsibilities
  • Widely considered "recession proof"
    and "Amazon proof"
  • Industry-leading market share and track record of profitability
  • Predominantly corner locations in urban markets with excellent demographics and population density
  • One of the lowest relocation rates in the net lease industry




  • Average Cap Rate
    5.53%
    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated every fiscal quarter)
    Credit Rating
    AA-
    Baa1
    Standard & Poor's
    Moody's
    Company Snapshot
    Company Name
    (Intl. Holding Co.)

    Seven & i Holdings Co., Ltd.

    Ownership Type
    (Intl. Holding Co.)

    Public

    Stock Symbol
    (Intl. Holding Co.)

    TYO:3382

    Headquarters
    (Intl. Holding Co.)

    Nibancho, Chiyoda, Tokyo, Japan

    Company Name
    (U.S. Subsidiary)

    7-Eleven,
    Inc.

    Ownership Type
    (U.S. Subsidiary)

    Private

    Headquarters
    (U.S. Subsidiary)

    Irving, TX

    Locations Worldwide

    66,500+

    Locations in the U.S.

    8,300+

    Website

    7-eleven.com

    Average Property & Lease
    Sales Price

    $1,721,828

    Annual Base Rent

    $73,148

    Annual Rent PSF

    $15.89

    Building SF

    4,603

    Price PSF

    $374

    Lot Size

    1.15 Acres

    Ownership Interest

    Fee Simple Land
    (Ground Lease)

    Lease Structure

    Absolute NNN

    Lease Term

    20 Years

    Escalations

    10% Every 5 Years

    Guarantor

    McDonald's Corp.

    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated quarterly)