Hanley Investment Group Arranges Sales of Two Single-Tenant Burger King Investments Totaling $6 Million, at Record-Low Cap Rates
MEMPHIS, Tenn. – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sales of two single-tenant net lease retail properties occupied by Burger King in Memphis, Tennessee to separate buyers. The combined value of the sales was approximately $6 million and traded at record-low cap rates. Hanley Investment Group has sold four single-tenant Burger King net lease investments within the past 90 days.
Hanley Investment Group Executive Vice President Matt Burnett, in association with Scott Reid & ParaSell, Inc., represented the seller, a private investor based in Los Angeles in both transactions.
According to Burnett, Burger King had long-term, absolute triple-net leases at both locations, which were operated by Carrols Corporation, the largest Burger King franchise in the world with over 1,000 locations.
The first property was located less than one mile from the Memphis International Airport and three miles from Graceland, a 13.8-acre estate once owned by Elvis Presley. Graceland is one of the most-visited private homes in the United States. Graceland receives around 600,000 visitors each year, compared to The White House and The Biltmore Estate, which both receive approximately 900,000 visitors per year.
The property, a 2,860-square-foot Burger King with a drive-thru, is located at 4650 Millbranch Road and was built in 2007 on an 0.85-acre pad. The sale price was $3,462,694, representing a cap rate of 4.75%, an all-time record-low cap rate for a Burger King in Tennessee and one of the top five lowest cap rate closings nationwide for a franchised Burger King in 2021.
“We opened escrow within one week of marketing the property and closed over list price,” said Burnett. “We also negotiated extended escrow periods and coordinated the timing of both closings to maximize the seller’s 1031 exchange.”
The buyer was a private investor based in New York City and was represented by Michael Soleimani, managing partner with New York-based SAB Capital.
The second property, a 2,124-square-foot, single-tenant Burger King with a drive-thru, which was built in 2008 on a 1.15-acre pad, is located at 5305 Winchester Road in Memphis. The sale price was $2,475,000, representing a cap rate of 4.82%, one of the top five lowest cap rate closings nationwide for a franchised Burger King in 2021.
“We procured five offers within the first week of marketing the property and closed at 97% of the listed price,” said Burnett. “We secured an all-cash, Southern California-based buyer and negotiated a seven-day due-diligence period and a 30-day close.”
According to Burnett, investors liked that the Burger King had a long-term, absolute triple-net lease and was operated by Carrols Corporation.
The buyer was a private investor based in Santa Barbara, California, and was represented by Jonathan Selznick, a principal with Lee & Associates in Ontario, California.
In May, Burnett along with ParaSell, Inc., represented the buyer in the purchase of a single-tenant Burger King in Augusta, Georgia. The month previously, Burnett, along with ParaSell, Inc., represented the seller in the sale of a single-tenant Burger King in Houston.
“The demand for single-tenant drive-thru restaurants continues to be very strong,” said Burnett. “We are working with many sellers that want to capitalize on this market and buyers who are looking to trade out of other asset classes or relocate their equity to other states. A single-tenant drive-thru restaurant with an absolute triple-net, long-term lease with a credit tenant offers an investor peace of mind and little to no maintenance requirements. We expect cap rates for these types of properties to remain low as demand exceeds supply.”