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  Chipotle


Average Property & Lease

Average Sale Price$1,900,000
CAP Rate (12mo avg with 10+ lease term)4.20%
NOI$79,800
$/Square Foot$700 - $800
Building Size2,100 - 4,200 sf
Lot Size0.43 - 1.55 acres
Lease Term15 Year NNN GL
Escalations7.5 - 12% Every 5 Years
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

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

Cons

  • NNN lease eliminates Landlord responsibilities
  • Fast-Casual Restaurant (Fastest growing segment of the restaurant industry)
  • Lease terms are generally 15 year NNN Ground Lease
  • Non-investment grade credit
  • Tough competition
  • Ground leases don't allow for depreciation
Tenant Description

When Chipotle opened its first store in 1993, the idea was simple: demonstrate that food served fast didn't have to be a "fast-food" experience. Chipotle use high-quality raw ingredients, classic cooking methods and distinctive interior design--features that are more frequently found in the world of fine dining. When Chipotle opened, there wasn't an industry category to describe what the company was doing. Some 20 years and more than 1,600 restaurants later, Chipotle compete in a category of dining now called "fast-casual," the fastest growing segment of the restaurant industry, where customers expect food quality that's more in line with full-service restaurants, coupled with the speed and convenience of fast food.

Chipotle tries to do a few things really well. The company elevates basic raw ingredients into food that's richer and more sophisticated through their recipes and cooking techniques. Similarly, Chipotle's restaurant design transforms simple materials in distinctive ways, giving their restaurants a style that's more architectural in nature and less dependent on standardized design elements. Chipotle's focus has always been on using higher-quality ingredients and cooking techniques to make great food accessible to all people at reasonable prices.

Chipotle is publicly traded on the New York Stock Exchange, CMG, with a market capitalization in excess of $22 billion. There are over 1,600 locations and over 45,000 full time employees. Chipotle was founded in 1993 in Denver, Colorado, where the company is based today. Chipotle operates in the United States, United Kingdom, Canada, Germany, and France.


CHIPOTLE TREND
CAP Rate

2013 avg: 5.94%

2014 avg: 5.62%

RECENT SALES

Chula Vista, CA

$3,125,000 | 4.0%

Mansfield, OH

$1,700,000 | 5.45%

MORE INFO
www.chipotle.com
Google Finance: CMG
Google News: CMG