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  Arby's


Average Property & Lease

Average Sale Price$1,791,833
CAP Rate (12mo avg with 10+ lease term)5.97%
NOI$108,061
$/Square Foot$600
Building Size3,000 - 3,500 sf
Lot Size0.5 - 1.0 acres
Lease Term20 +/- Years
EscalationsVaries
CREDIT RATING
N/A
S&P
N/A
Moody's
view credit rating chart
View Net Lease Property Listings at CALKAIN.COM Last Updated: September 9, 2016
Net Lease Advisor Overview

Arby's is a privately held company with freestanding stores ranging around 3,000+/- SF with unique architecture and a drive-thru window, situated on .5 - 1.0 acre of land. It is important to note that Arby's franchises the majority of its locations leading to various lease agreements and guarantors operating under the Arby's banner. As a result, lease terms vary as do cap rates based on the size and strength of the operator and sales at a particular location. Generally the lease term is 20 years with 2-4 five year options with either annual increases of 1-2% or up to 5-10% every 5 years.

Pros

Cons

  • Higher cap rates available
  • Engaged in heavy advertising to improve brand image and market penetration
  • Often new favorable NNN leases with good increases
  • Must look closely at performance of franchisor across all locations
  • Must review sales history at subject location
  • Not all leases require sales reporting
Tenant Description

Arby's is a 52-year-old legacy brand in the midst of a growth spurt. Arby's Restaurant Group, Inc. owns, operates, and franchises quick-service sandwich restaurants with menu items that include meats, sliders, salads, sides, beverages, and desserts. Arby's was founded in 1964 and is headquartered in Atlanta, Georgia. Roark Capital Group acquired the company in July 2011 and owns 81.5% of the company, with The Wendy's Company owning the other 18.5%.

Arby's has more than 3300 restaurants and with plans to open more. Their franchisees are also expanding their operations. For instance, United States Beef Corporation (U.S. Beef), which owns more than 330 Arby's locations nationwide, plans to expand to 400 locations by 2020. AEG Group LLC, which is owned by former RTM Restaurant Group president John Wade, has 21 Arby's® restaurants and hopes to aggressively expand by 2025. Joe Brumit, a longtime restaurateur who started his career at a burger franchise before becoming an Arby's franchisee has expanded from 13 locations in 1988 to 34 in 2010 and 44 in 2015.

Arby's new restaurant design requires less square footage, and uses a flexible array of elements that allow franchisees to take advantage of a variety of real estate opportunities, including urban inline locations, end caps with drive-thrus, and in travel plazas and non-traditional locations. At 2,000 square feet, the restaurant is about two-thirds the size of a typical 3,000-plus square foot freestanding Arby's.
ARBY'S TREND
CAP Rate

2015 avg: 5.54%

2016 avg: 5.45%

RECENT SALES

Owasso, OK

$1,600,000 | 5.00%

Mount Pleasant, SC

$1,474,509 | 5.10%

MORE INFO
www.arbys.com