Tenant: McDonald’s
Premises: 4393 SF
Renewal Options: 8 x 5 Year
Lease Expiration: 2034
Lease Type: NNN
Rental Increases: 10% Every 10 Years
- Absolute 20 year NNN Ground Lease with zero landlord responsibilities commencing January 10, 2015
- McDonald’s breaking ground and beginning development of building the first week of December with building proposed to be completed by first week of January
- Long term 20 year initial lease with 8 – 5 year options following
- Lease calls for a 10% rental increase at year 11, and 10% rental increases at the start of each option period
- McDonald’s corporate lease with an investment grade Standard and Poor’s credit rating of ‘A’
- Below market rent for a new corporate McDonald’s ground lease – rent commencing at $72,000 annually
The McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries across 35,000 outlets. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. McDonald’s Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2012, McDonald’s Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion.
McDonald’s primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies, fruit, and seasoned fries.
