chi-CasualDiningQ12017PhotoBox

CHICAGO—Millennials have disrupted the office sector with theirpreferences for open collaborative environments, but they are alsodisrupting the world of restaurants with their preferences forhealthy food and more home delivery. As a result, investors in thenet lease casual dining sector have grown a bit more cautious, andthe most sought-after brands are the ones that have adjusted to thetimes.

Applebee's is perhaps the best example of achain that fellout of favor with its next generation of customers,and now has to make painful adjustments. The negative publicity hashad an impact on investors. In the past year, cap rates forfranchisee-operated Applebee's increased 46 bps to 6.7%, accordingto a new report on the sector from the BoulderGroup, a Wilmette, IL-based net lease firm. And the medianrates for IHOP, another chain undergoing a struggle, increased 20 bps to 6.4%.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.