DineEquity Sells Chain's HQ in Leaseback Deal

However, DineEquity is not considering the SLB as a sale, as it plans to sublease part of the building. A company source tells GlobeSt.com that company-owned restaurant sales, with 181 transferred in an SLB last month, 26 this month and another 15 planned to sell in the fourth quarter, will lessen floor space. "We reduce headcount, we need less space. We don't know how much at this time," the source says.

The building was constructed specifically for Applebee's, and the company's officers moved to the site in December. However, DineEquity, which also owns IHOP Restaurants, has hundreds of millions of dollars in consolidated funded debt. The 181-store sale allowed an approximate $303 million payment to that debt, and the company will use $20 million of the HQ SLB to pay in full the balance of the $350 million debt. The $19 million of remaining cash will be used for unpaid transaction-related expenses associated with the purchase of Applebee's, as well as for general corporate purposes, according to a DineEquity press release.

The building includes a 9,793-sf culinary center, one of the largest in the casual dining industry and the focal point of the entire building. It includes a full replication of an Applebee's restaurant kitchen and is used for menu development, food auditing, research, evaluation, testing and training.

"We are wholly focused on our efforts to re-energize the Applebee's brand and to execute on our strategy of franchising the majority of Applebee's company-operated restaurants," said Julia Stewart, the company's chairman and CEO, in the statement. "Based on the level of interest we have in company-operated restaurants, we remain confident in our ability to execute our franchising plan." Her firm sold 26 restaurants in Southern California in early July, and plans to sell 15 of the company-owned Applebee's in Nevada some time in the fourth quarter. The company franchises and owns more than 3,300 restaurants worldwide.