Denny’s TENANT OVERVIEW


Pros

  • NNN leases
  • Rental increases throughtout primary term of lease
  • Ease of releasing building

Cons

  • Not Rated by Moody’s or S&P
  • Franchisee operators

Tenant Description

Denny’s is a restaurant chain best known for their breakfast around the clock.

Denny’s is a great net lease investment because of the triple net structured leases they tend to sign. They require no landlord responsibilities from an investor. While nearly all the locations are operated by franchisees, Denny’s Corporation (NYSE: DENN) will work with the franchisees on site selection. Potential sites are evaluated by Denny's development team to ensure they have strong real estate fundamentals - good demographics, visibility, and proximity to high-traffic consumer activities. All of which are attractive aspects for any net lease property. Denny’s typically operates in free-standing buildings between 3,800 – 5,000 square feet in a common restaurant floorplan on 1 acre of land. This type of floorplan is very easy to adjust should Denny’s vacate and the owner needs to retenant the property.

Denny’s was founded in 1953 as Danny’s Donuts by Harold Butler and Richard Jezak in Lakewood, CA. The name and concept has evolved into a full-service restaurant chain named Denny’s. Today they are headquartered in Spartanburg, SC and have over 1,700 locations worldwide, most of which operate 24 hours a day, 7 days a week.

Average Cap Rate
5.60%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,470,683
NOI $138,358
$/Square Foot $475 - $625
Building SF 3,800 - 5,000 square feet
Lot Size 1.00 Acre
Lease Term 15 - 20 Years
Escalations 5 - 10% Every 5 Years
Stock Symbol DENN
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
6.15%
2016
5.88%
2017
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Henderson, NC 5.85%
Monterey, CA 4.15%
Venice, FL 6.30%