Dunkin’ Donuts TENANT OVERVIEW


Net Lease Advisor Tenant Dunkin Donuts

Pros

  • Lease usually includes increases
  • Typically very landlord friendly lease structure, either NNN or ground leases
  • Usually very high profile real estate
  • Smaller parcels but reusable

Cons

  • Shorter lease terms
  • Non-investment grade credit
  • A lot of franchisee operated stores, means doing proper due diligence on credit of guarantor, performance of store, etc.

Tenant Description

Dunkin’ Donuts is a chain of QSR restaurants best know for their coffee and donuts.

Dunkin' Donuts is an attractive net lease asset for many investors. Their locations are usually well located in shopping centers, mini-malls, etc. and are easily accessible by their customers. Dunkin' Donuts parcels tend to be smaller but they are also very reusable due to their high-profile locations. The smaller parcel size also means Dunkin' Donuts net leases typically pay lower rent, which leads to lower price points. Since Dunkin' Donuts deals with perishable items they do not face the same danger many brick & mortar retailers face from online commerce. Dunkin' Donuts net lease properties usually include rental increases in their leases making them a popular choice for net lease investors.

In 1950 Bill Rosenberg opened the first Dunkin' Donuts restaurant in Quincy, Mass., with the goal to "make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores." Rosenberg licensed the first of many franchises in 1955.

Dunkin' Donuts is the world's leading baked goods and coffee chain, serving more than 3 million customers per day. Dunkin' Donuts is still using the original proprietary coffee blend recipe established by its founder. Dunkin' Donuts sells 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast sandwiches and other baked goods.

Dunkin’ Donuts operates more than 8,500 restaurants across 41 states and the District of Columbia, as well as more than 3,200 international restaurants in 36 countries.

Dunkin' Donuts has earned the No. 1 ranking for customer loyalty in the coffee category by Brand Keys for eleven years running.

Average Cap Rate
5.36%
12 mo avg with 10+ lease term
Average Property & Lease
Average Sale Price $1,723,626
NOI $92,386
$/Square Foot $800
Building SF 2,200
Lot Size 0.5 - 1.5 Acres
Lease Term 15 - 20 Years
Escalations 8-10% Every 5 Years
Stock Symbol DNKN
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
5.44%
2016
5.61%
2017
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Greenville, SC 5.25%
Smyrna, TN 6.02%
Casa Grande, AZ 5.28%