ATLANTA—Kings Family Restaurants has been trying to find the right buyer for 12 properties in Atlanta for a long time. The restaurant brand finally sealed a creative sale-leaseback deal with a private equity group based in California.

Andrew Ackerman, managing director at Sands, represented the buyer. The firm also provided $17 million in acquisition sale-leaseback financing necessary to close.

“The Kings Family Restaurants are well-regarded in Pennsylvania but the time had come to put some value back into the chain,” says Ackerman. “The buyer recognized that these assets were under-utilized and that there was a greater opportunity to increase cash flow with the right operational changes. The acquisition sale-leaseback formula was a win-win for all parties in that it created the necessary capital to finance the long-term plans for the restaurants.”

Ackerman got creative to finance the transactions. First, he completed a sale leaseback of the 12 restaurants to Store Capital, an AZ-based REIT. This set the stage for the buyer to sell the real estate while simultaneously entering into a long-term lease with the California buyer, providing an opportunity to reinvest the capital into the operations.

“This transaction demonstrates the increasing investment strength of regional brands,” says Ackerman. “In this case, rather than look to a national brand, the greater opportunity was in focusing on a turnaround strategy with a well-known regional operator.”

Sands specializes in the buying and selling of net lease properties for private investors and institutions across the United States. Since launching in 2010, Sands has closed over 625 transactions worth more than $2.1 billion in 45 states.

Sands founder Chris Sands says that the creative strategy employed in this deal differentiates the firm's niche” “By focusing on net lease, we have broader access to the right buyers and can better match investment goals. These types of transactions are more than a simple investment strategy as this is a longer-term strategy to add value to a portfolio.”