Captain D’s TENANT OVERVIEW


Net Lease Advisory Tenant Captain Ds

Pros

  • NNN lease eliminates landlord responsibilities
  • Annual increases on some leases

Cons

  • Private company
  • Must look closely at performance of franchisor across all locations

Tenant Description

Captain D’s is a quick serve seafood restaurant committed to serving freshly prepared seafood at a great value.

Americans are moving towards a fast-casual dining experience that feels like a restaurant and is good for them. This is what makes Captain D's an attractive investment. Most leases are absolute NNN ranging from 15 to 20 year terms. They may have an annual increase of 1-2% or 7-10% every 3 to 5 years.

Captain D's corporate stores typically yield a lower cap rate than their franchise counterparts. However, the seafood franchises have proven extremely versatile, with top-performing locations in rural towns, in suburban enclaves and in dense urban areas.

The first Captain D's Seafood Restaurant opened on August 15, 1969, in Donelson, Tennessee, under the name Mr. D’s Seafood and Hamburgers. Within four years there were 15 locations, and Mr. D's Seafood and Hamburgers became Captain D's.

The restaurant's focus became the fish and chips, which includes freshly prepared entrees and the company's signature hand-battered fish, which is cooked to order. The restaurants also offer premium-quality, grilled items such as shrimp, and surf and turf, as well as hushpuppies, desserts and freshly brewed, Southern-style sweet tea.

In the 1980s and 1990s, Captain D's franchise opportunities grew throughout the Southeast. Today, Captain D's has 514 restaurants in 21 states, with a large cluster of restaurants in the Southeast and an expanding footprint in other states. About half the restaurants are owned by franchisees.

Captain D's has experienced a recent surge of franchise development, propelled by the company's ongoing success, reporting six consecutive years of same-store sales increases.. As part of this accelerated growth, the company has signed agreements to expand the brand’s presence in Illinois, Texas, Virginia, North Carolina and Kentucky.

Average Cap Rate
6.37%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $1,237,250
NOI $78,813
$/Square Foot $450
Building SF 2,400 - 3,400
Lot Size 0.6 - 1.2 Acres
Lease Term 15 Years
Escalations Varies
Stock Symbol N/A
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
6.87%
2016
7.24%
2017
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Louisville, KY 8.22%
Canton, GA 7.25%
Montgomery, AL 6.25%