AUSTIN—Increasingly, Austin-based Sands Investment Group (SIG), a net lease company, is finding that investors are demanding the product type.
Recently, SIG's Max Freedman represented a Wendy's operator in a $2.97-million sale leaseback of a restaurant in Palmdale, CA, at a 5.75 percent cap rate. According to reps for SIG, the operator had been at the location since 2000, producing more than $2 million in annual sales, making it one of the highest-producing fast food restaurants in the market. The operator was able to use the proceeds to pay off its existing debt obligations and fund the opening of new operations.
Freedman also represented the developer in the $1.5-million transaction for a new construction, build-to-suit Taco Bell located in Cairo, GA. The property provided an outlet for a 1031 exchange buyer to secure investment with an attractive 20-year absolute triple net lease at a 6 percent cap rate.
“These deals are indicative of what we are seeing in the franchise fast food net lease space right now,” says Freedman, who oversees SIG's Austin office. “At the same time we're experiencing a lack of inventory, we're seeing a larger buyer pool in the market that now includes the REITs and institutional buyers who had typically stayed away from non-credit tenants but are now chasing yield, making these more attractive opportunities.”
Another constant is that location in fast food drives demand. For example, the Wendy's site is located at the signalized entrance to a Target/Lowe's supercenter that is one of the area's main shopping destinations.
“Across the board, transactions we've closed in the fast food space are typically generating multiple offers and closing at or above the original asking price,” says Chris Sands, SIG founder. “The velocity only underscores the demand for a complete strategy and deep understanding of the transaction from all angles. You have to understand the product-type, in this case fast food, from all aspects and be able to evaluate the benefits for all involved.”
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more information visit Asset & Logo Licensing.
