One of the largest sectors in thenet-lease space is quick service restaurants (QSRs), consisting ofstand-alone locations flagged with tenants such as Wendy's,KFC/Taco Bell, and Burger King.

While these locations may looksimilar, their operating structure can vary significantly. On oneextreme, the restaurant may be operated and tenanted by afranchisee with just one or two locations. On the other, thefranchisee operator could have thousands of locations, or the storemay even be corporately owned.

For buyers of these properties, thestrength of the operator is of primary concern, as this istypically the guarantor of the lease. The stronger the guarantor,the more secure the payments, the less risky the investment andconsequently the lower the cap rate the property will trade for.Indeed, within similar QSRs, cap rates vary significantly byguarantor type.

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Jonathan Hipp

Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.