Net Lease Advisor Tenant Steak n Shake


  • NNN lease eliminates landlord responsibilities
  • Annual increases on most leases
  • Several lease extensions of five years each


  • Non-investment grade by both S&P and Moody's
  • Must look closely at performance of franchisor across all locations

Tenant Description

Steak ‘n Shake is quick serve restaurant known for their steakburgers and milk shakes.

Steak ‘n Shake is an attractive net lease asset because of the trajectory it is currently on. In 2008, Steak ‘n Shake was struggling before being bought by Biglari Holdings. With new ownership and a new direction, they have experienced consistently strong performance year after year.

The properties Steak ‘n Shakes are located on are also a major appeal. Most Steak ‘n Shakes are in quality locations and have the ability to to be easily converted to another QSR if Steak ‘n Shake were to vacate. These factors help the building and land retain a high value.

Steak 'n Shake pioneered the concept of a 'better burger', by hand-crafting cuts of steak to create its flagship Steakburgers™. Since then, the brand has become one of the most recognized and loyal brands in the restaurant franchising business.

Steak 'n Shake was founded in 1934 by Gus Belt who converted a gas station and chicken restaurant in Normal, Illinois, into a hamburger stand. Steak 'n Shake Operations, Inc. is a wholly owned subsidiary of Biglari Holdings Inc. the major shareholder in the business is American entrepreneur Sardar Biglari, who owns Maxim magazine.

The word "steak" stood for steakburger. The term "shake" stood for hand-dipped milkshakes. Gus was determined to serve his customers the finest burgers and shakes in the business. To prove his point that his burgers were exceptionally prime, he would wheel in a barrel of steaks (including round, sirloin, and T-bones) and grind the meat into burgers right in front of the guests. Hence arose the origin of our famous slogan, "In Sight It Must Be Right."

Today the company employs 22,000 people at more than 417 company restaurants and 173 franchise units. They are undergoing an aggressive expansion. The company has an international development team headquartered in Monaco who are masterminding the expansion across Europe and the Middle East, with Steak 'n Shake restaurants now open in England, France, and Italy.

Average Cap Rate
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,540,500
NOI $157,511
$/Square Foot $675
Building SF 3,700
Lot Size 0.8 - 1.2 Acres
Lease Term 20 Years
Escalations 10% Every 5 Years
Stock Symbol BH
Credit Rating
S&P B-
Moody's B3
Average Cap Rate Trend
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Myrtle Beach, SC 6.00%
Augusta, GA 6.40%
Lake Mary, FL 5.65%