QSR Net Leases in Great Demand

CHICAGO—Investors have been pouring money into the single-tenant net lease market, pushing down cap rates to historic lows, and quick service restaurants have also benefitted from the extraordinary demand, according to a new study by the Boulder Group, a commercial real estate firm in suburban Chicago.

“It’s just a real active part of the market,” Randy Blankstein, president of Boulder, tells GlobeSt.com. “Everyone is looking for triple net lease products,” and buying up restaurants adds needed diversity to portfolios stocked with auto parts stores and dollar stores, among other popular sectors. As an example of the extraordinary demand for restaurants, he points to Golden Gate Capital’s acquisition of Red Lobster® from Darden Restaurants and the simultaneous closing on about 500 locations by American Realty Capital Properties, Inc. in a $1.5 billion sale-leaseback transaction.