IRVINE, CA—After successfully marketing and selling 28 Ruby Tuesday properties totaling approximately $65 million on behalf of Ruby Tuesday, Inc. (NYSE: RT), Faris Lee Investments, the nation’s largest retail-specialized investment advisory firm, has been engaged once again to sell an additional 20 properties valued in excess of $60 million.
In December 2011, Faris Lee was selected to market a first phase of properties occupied by Ruby Tuesday restaurants. Since taking the assets to market, Faris Lee has now completed phase one with all 28 properties sold. This accomplishment marks the largest sale-leaseback offering by a publicly traded restaurant operator to the private marketplace ever.
“Faris Lee was able to execute on the first 28-property offering at record-breaking cap rates never achieved in many of the markets where these properties were located,” said Matt Mousavi, managing director of Faris Lee Investments who represented Ruby Tuesday, Inc. as well as the majority of the individual buyers on the transactions. “As opposed to selling the properties in a portfolio scenario, Faris Lee employed the strategy to sell the properties individually which insulated value and provided access to the seller to the vast private-market net leased buyer pool, resulting in higher proceeds per unit for the seller, and cap rates 200 basis points below the institutional buyer for the same offering.”
“This assignment has been incredibly successful,” said Rick Chichester, president and COO of Faris Lee Investments. “Faris Lee has been able to raise a substantial amount of liquid capital for Ruby Tuesday, Inc . This has strengthened the company’s balance sheet and provides the company with the capital for opportunistic share repurchases, to expand their store base, re-structure debt and make acquisitions.”
As testimony to the successful strategy, Faris Lee was recently engaged in December 2012 by Ruby Tuesday to dispose of a second phase of sale-leaseback assets. This phase includes 20 properties with an aggregate value in excess of $60 million.
Due to the incredible success of the first phase, Faris Lee has lowered the asking cap rates by 50 basis points on the second phase. Faris Lee reports that the second phase has received strong interest, with six of the properties already under contract at or above list price.