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ESCONDIDO, CA-Realty Income Corp. has agreed to acquire 89 Pizza Hut locations in 13 states from NPC International Inc.,the largest Pizza Hut franchisee, for $59 million. The company says that it also plans to acquire an additional 11-unit Pizza Hut portfolio some time after this deal closes.

The stores that Realty Income is buying are under long-term triple-net leases and, on average, measure 3,000 sf on lots of 37,000 sf. The company plans to hold most of the properties, about $58 million worth, in its core portfolio. It will place the remaining approximately $1 million in its Crest Net Lease Inc. subsidiary for future sale.

NPC International operates approximately 800 stores in the Midwest, South and Southeast. NPC stores comprise approximately 13% of the domestic Pizza Hut restaurant system and 17% of the domestic Pizza Hut franchised restaurant units.

The stores being acquired by Realty Income represent “prime retail locations”and are seasoned locations that provide “strong unit level cash flow rent coverages,” according to Tom Lewis, CEO of Realty Income. He notes that Realty Income has previously acquired NPC properties that have been good buys for the Escondido-based company.

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