Burger King Transactions Sale Leaseback Strategy

Arkansas, (April 17, 2017) – Sands Investment Group (SIG), one of the fastest growing net lease firms in the United States, announced that the firm has completed three single-tenant Burger King transactions as part of a five-unit sale leaseback portfolio. The two additional properties are set to close by the end of April.

SIG developed the strategy in conjunction with the owner Flis Enterprises, Inc.  Elan Sieder and Max Freedman of SIG represented the seller, Flis Enterprises, Inc., in all of the transactions.

The sales include:

• Burger King, located at 14916 Cantrell Road, Little Rock, Arkansas, for $1.4 million at a capitalization rate of 6.23%.
• Burger King, located at 1100 W Main St., Cabot, Arkansas, for $1.745 million at a capitalization rate of 5.5%.
• Burger King, located at 1832 Hwy 62 East, Mountain Home, Arkansas, for $1.5 million at a capitalization rate of 5.75%.

Flis Enterprises, Inc., founded in 1979, operates 21 Burger King restaurants throughout Arkansas. In late 2016, they engaged SIG to value their real estate portfolio and propose strategic opportunities to both maximizing the current value and to expand into new opportunities in the restaurant space.

According to Sieder, “SIG devised the sale leaseback strategy where the lease expiration matched the expiration date of the client’s franchise agreement. This allowed the owner to secure lower occupancy costs throughout the term of the lease while reducing existing debt.”

“Additionally, SIG’s sale-leaseback strategy enabled the sellers to acquire and upgrade a high-performing unit within their operating portfolio with an expiring lease.  This trade-off upgraded the quality of the client’s overall portfolio and will benefit them for years to come,” Sieder added.

Flis Enterprises, Inc. is now planning further expansion into new Arkansas markets where they project strong unit-level sales and are considering other opportunities for new construction and sale-leaseback activity.

“We started from humble beginnings over 37 years ago and only entered the real estate side of the Burger King business in 1995.  Before our transactions with SIG, we were exclusively buyers – we had never sold a single property,” said Christopher Flis. “SIG gave us a new perspective and it has been exceedingly beneficial to work with them.   SIG has delivered on their commitment to meaningfully decrease our real estate debt while concomitantly increasing the cash flow of our overall portfolio.  And all the while, they have provided gold-plated customer service and been true professionals in every way.”