Chipotle is a highly sought after brand. There is great demand for their freestanding stores as net lease investments. The properties are well located near major shopping centers, university and college campuses, and business centers. Chipotle typically features a 2,100 - 4,200 +/- SF building, and are usually situated on 0.43 - 1.55 acres of land. Chipotle net lease properties provide a long-term investment with no property management responsibilities. Generally the lease term is a 15-year NNN Ground Lease with four, five-year options with 7.5-12% increases every 5 years. Chipotle leases are corporately guaranteed. Chipotle's sales growth over the last decade is the highest across the "quick service/fast casual" segments. The chain is growing fast in part because of the rising popularity of Mexican food.
Pros:
NNN lease eliminates Landlord responsibilities
Fast-Casual Restaurant (Fastest growing segment of the restaurant industry)
Lease terms are generally 15 year NNN Ground Lease
Cons:
Non-investment grade credit
Tough competition
Ground leases don't allow for depreciation
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