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Trends in Casual Dining That Impact Real Estate Value

The casual dining sector is evolving rapidly due to changing consumer preferences and technological advancements. These shifts are going to start having an impact on property values, making it essential for commercial real estate investors to understand how these trends influence investment potential. By aligning investments with the current trends shaping the casual dining landscape, investors can ensure long-term value growth and portfolio resilience.

  1. Enhanced Customer Experiences and Property Value

Today’s diners seek more than just good food—they want memorable, immersive experiences. In response, casual dining establishments are investing in ambiance, expanding outdoor seating, and incorporating entertainment features. Properties that can accommodate these elements can help to increase the value, as they allow tenants to cater to the demand for experiential dining. For investors, choosing adaptable spaces that enhance customer experience can attract tenants who are willing to pay higher rents and sign longer leases. This ultimately boosts the property’s income potential and enhances overall asset value.

  1. Digital Integration as a Value Driver

The adoption of digital solutions such as online ordering, delivery, and contactless payments has become a standard in casual dining. Properties with robust digital infrastructure—like high-speed internet and dedicated pickup areas—are increasingly appealing to tenants who want to stay competitive in the digital age. Doug Roland, investment advisor at Sands Investment Group, notes that with the rise of platforms like Uber Eats and DoorDash, operators have been able to “utilize smaller square footage, less parking, and reduce labor costs. This setup makes for more stable tenants which ultimately reduces investor risk.” Working with SIG investment advisors allows investors to have access to key insights into which tenants and operators are taking advantage of technological advancements and which are not.

  1. Sustainability Enhances Appeal and Long-Term Value

Environmental consciousness is rising among both consumers and businesses. Casual dining establishments are thus seeking eco-friendly, energy-efficient properties. Buildings that offer sustainable features often command higher values because they align with tenants’ goals of reducing environmental impact and operational costs. Sustainable properties attract tenants willing to pay a premium for green features such as solar panels, gray water recycling, and LED lighting, which in turn strengthens tenant retention and supports long-term value growth. Investors who focus on sustainability not only meet current market demands but also mitigate potential risks associated with future environmental regulations, adding to their properties’ resilience.

  1. Multi-Use Spaces Increase Versatility and Value

Casual dining establishments are increasingly interested in spaces that can serve multiple purposes beyond dining, such as hosting events or providing co-working areas. Multi-use properties that offer this flexibility tend to have higher market values as they can cater to diverse tenant needs and adapt to shifting demands. For investors, this versatility translates into greater revenue potential, as such properties can attract a broader range of tenants looking for spaces that maximize both utility and adaptability.

  1. Prime Location and Accessibility as Core Value Indicators

Despite the rise of delivery services, location remains critical for casual dining success. Doug Roland emphasizes that “geography is very important, as properties in high-traffic areas with easy access to parking and public transit continue to attract a steady flow of customers”. For investors, focusing on properties in strategic locations helps maintain strong rental rates and consistent tenant demand. By choosing locations with prime accessibility, investors increase their chances for not only stable income but also long-term property appreciation.

  1. Menu Innovation and Its Influence on Property Value

Menu innovation is another trend influencing casual dining real estate. Diners today are more adventurous, favoring unique, high-quality, and often health-conscious options. Restaurants focused on menu innovation often require adaptable kitchen spaces that can accommodate evolving culinary trends and specialized equipment. Properties with flexible layouts or potential for kitchen expansion appeal to tenants who prioritize menu creativity as a way to differentiate themselves. Investors who recognize this trend can select properties that cater to forward-thinking tenants, enhancing both rental income and property value.

How SIG’s Investment Advisors Provide Value to Investors

Our investment advisors bring valuable insights to investors in casual dining real estate by aligning investment strategies with key market trends. Through expert analysis, we identify properties that are adaptable, digitally integrated, and sustainability-focused, ensuring these assets meet current tenant demands and support long-term growth. By leveraging their deep knowledge of prime locations and multi-use property potential, our investment advisors help investors make informed decisions that optimize property value, attract quality tenants, and enhance portfolio resilience. This strategic guidance positions investors to navigate a dynamic market effectively and secure sustainable returns.

Contact our restaurant team today to learn more about our services and how we can help you achieve your financial goals.

How SIG Sold The Promise of An Extended Lease on a Walgreens Deal in Houston | Case Study

walgreens for saleInterested in buying or selling a Drugstore? When the goal is growing an investment portfolio with specific properties, you can’t trust a typical real estate agency to walk you through the process. SIG is a commercial real estate brokerage firm with a wealth of experience helping clients find, secure, and purchase properties to round out their investment portfolio. Check out our newest drugstore listings to hit the market.

Understanding a 1031 Property Exchange in Commercial Real Estate

Commercial real estate investment can be complex, especially when you get into some of the more granular details and processes. For some investors, growing a portfolio is a key to success. In order to do this, there are many different opportunities to buy, sell and trade commercial real estate properties. When a real estate investor knows they want to sell one property and buy another for investment or business purposes, they can conduct what is referred to as a 1031 exchange. Read more →

1031 Exchange Property

What is the 1031 Exchange Intermediary Definition?

When conducting a 1031 exchange, investors can utilize a 1031 exchange intermediary for an easier process. The term 1031 exchange comes from the Internal Revenue Code (IRC), section 1031, which states, “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”

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Chris Sands named in Connect Commercial Real Estate’s 2021 Top Broker Awards

Opening the doors of Sands Investment Group during the global financial crisis in 2010, Chris Sands has thrived in the face of hard times from the very beginning. He stays committed to investing for success well into the future by focusing on relationships built by win-win deals, collaboration and transparency. In 2020, through its founder’s leadership, SIG doubled in size—gaining recognition as one of Inc 5000’s Fastest Growing Private Companies in America.

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Forbes: Commercial Real Estate Outlook: A Look Back At 2020 And What’s Ahead In 2021

March 12, 2021 – By Chris Sands: Throughout 2020, commercial real estate demonstrated its stability and value despite a wide range of unanticipated challenges. While we can generally understand the market within a 10-year timeframe that includes adapting to market corrections, the global Covid-19 pandemic created a more significant challenge than we’ve seen before in terms of our ability to predict investors’ outcomes.
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2021 Market Outlook: Essential Triple Net Concepts Prove to Be Stable Investments in a Shifting Market

Despite the challenges we’ve seen this year, 2020 has been very inspiring and eye opening in terms of demonstrating the stability of commercial real estate through shifting times. Generally, we are privy to understanding the market within a 10-year timeframe that includes adapting to market corrections—however, with the last global pandemic taking place nearly 100 years ago and an industry shift that wasn’t brought on by a market correction, it was a greater challenge than ever to anticipate and predict the outcome for investors. Read more →

1031 Tax-Deferred Exchange Definition


For real estate investors, 1031 exchanges create an opportunity for investors to move from one property to another and provide tax benefits for doing so. With the help of a tax-deferred exchange company, you can sell one or more property and defer the payment of capital gain taxes by acquiring a replacement property. This allows you to keep 100 percent of your money working for you instead of paying about one-third that equity to taxes. However, in a 1031 tax deferred exchange, there are very specific requirements that need to be followed. 

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The Benefits of a 1031 Exchange Investment

When considering using a 1031 exchange for the sale of one property and the purchase of another, investors should consider the benefits they can gain from such a transaction. These 1031 exchanges are transactions that real estate investors often use to increase their wealth, save on taxes with the tax deferrals, and grow their portfolios. It’s a strategy that is used by many investors across the country.

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Top Broker Honoree: Sands Investment Group’s Chris Sands

Named Rookie of the Year for 2004 at Marcus & Millichap, Chris Sands launched his own business in 2010. His vision for Sands Investment Group was to establish a highly-specialized and knowledgeable company able to provide buyers and sellers of net leased properties with a level of service unprecedented in the industry. To this endeavor, the former professional tennis player applied the drive and termination that enabled him to compete at the highest level of his sport. Read more →

Rules of a 1031 Exchange

1031 exchange real estate can present great opportunities for investors who want to move seamlessly from one property to another, while obtaining tax benefits on sale proceeds that provide them with more capital to put into a new property.

However, in order to get all the tax benefits of a 1031 exchange, a deal must meet specific parameters and a specific set of rules and timelines must be met throughout the entire process and the necessary transactions.

You can consider this guide the CliffsNotes for 1031 exchanges or a 1031 exchange for Dummies handbook, which will provide an overview of 1031 exchanges and explain all the rules, eligibilities, and timeframes that you need to know if you’re considering changing or upgrading the properties in your investment portfolio.

What is a 1031 Exchange?

A 1031 exchange is the commercial real estate investment term derived from the Internal Revenue Code (IRC), section 1031, which states, “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”

Essentially, 1031 exchange properties allows an investor to sell a property and then use tax-free profits from that sale toward the purchase of another investment property that is of similar value (or greater).

A 1031 exchange can be extremely advantageous for investors who are looking to diversify their portfolio with a more profitable property type or move into a different, more passive type of investment.

For example, at Sands Investment Group, we’re seeing a shift in investment strategy that leverages the 1031 exchange. Many of our buyers are investors who are looking to sell an existing, high-touch investment property (such as an apartment complex) and use the tax free proceeds of a 1031 exchange to invest in a triple net (NNN) lease property that provides conservative, consistent returns, but doesn’t require landlord duties or heavy owner involvement. NNN lease properties offer a more passive income stream, and we’re seeing more and more investors opt for this route via the 1031 tax deferred exchange deal.

1031 Exchange Guidelines

A 1031 exchange can be an ideal solution for an investor who wants to move quickly out of one investment property and into another, without having to worry about taxed capital gains or paying income taxes on the sale of an existing investment property.

Along with the tax deferral opportunity inherent in the 1031 exchange comes a set of very specific rules, regulations, and timelines that must be adhered to in order to qualify for this type of deal and reap the full benefits.

We’ll now discuss those important 1031 exchange rules, timelines, and other factors influencing this type of investment.

Like Kind Exchange Properties

In order to pursue a 1031 exchange, both the existing property being sold and the new one being purchased in the deal must meet like-kind property requirements. The like-kind rule doesn’t necessarily apply to the quality of the properties, but dictates that properties exchanged must be similar in value and type and fall into the classification of “real property.”

The two properties must also be used for investment or income purposes, and cannot be for personal use. To achieve full 1031 exchange benefits, it’s also best if the property being purchased is of equal or greater value of the property being sold.

The price difference between properties in a 1031 exchange is known as a “cash boot.” If the new property being purchased in the exchange is less than the existing property that was sold, the price difference is taxable. So it’s advantageous for investors to find a replacement property as close in value to their existing one as possible, to fully take advantage of the 1031 tax exchange benefits.

Like-kind property types apply only to “real property” including land, commercial buildings, residential buildings, but no other types of assets can be used in the exchange. For example, an investor can exchange a piece of commercial land for a vacant lot, or they can sell an apartment complex for a tenant-occupied business property. However, a piece of land or an investment property cannot be exchanged for stocks or other non-property type assets in an exchange.

Transaction Expenses: What’s Covered by 1031 Exchange Funds (and What’s Not?)

Some expenses related to a 1031 exchange transaction can be covered with funds in the deal, but there are other expenses that aren’t included.

Costs that can be covered by 1031 exchange funds:

  • Broker commission
  • Legal and tax advisor fees associated to the deal
  • Filing fees
  • Title insurance
  • Finder fees
  • Escrow fees

Costs not covered by 1031 exchange funds:

  • Insurance premiums
  • Property taxes
  • Repairs or maintenance

1031 Exchange Timeline

A very strict and specific set of 1031 exchange time limits and deadlines must be adhered to over the course of any 1031 exchange deal.

Here’s a basic timeline of how a 1031 exchange timeline unfolds.

  1. The investor sells their existing property.
  2. The funds from that sale are transferred to a qualified intermediary to hold in escrow for the next sale.
  3. Upon the sale of their existing property, the investor has 45 days from the sale date to identify the new property they want to buy in the exchange, and make an offer.
  4. The intermediary will transfer funds for the purchase of the new property upon accepted offer.
  5. The 1031 exchange deal must be finalized and close within 180 days of the sale date of the first property.

Timeline Specifics for Identifying a New Property in a 1031 Exchange

As noted above in our timeline of a 1031 exchange, an investor has 45 days (from the sale date of their existing property) to identify the property they would like to purchase in the exchange. There are a few different distinctions on identifying properties that are important to know when scoping out new investment properties.

An investor needs to look for a replacement property according to these guidelines:

  • Three-Property Rule: The three-property rule allows an investor to identify up to 3 properties that they’ll potentially purchase in the 1031 exchange. The market value of the 3 properties isn’t held to any restrictions in this rule.
  • 200% Rule: The 200% rule says that an investor can choose as many potential replacement properties as they like, so long as the cumulative value does not go over 200% of the existing property being sold.
  • 95% Rule: The 95% rule states that an investor can identify as many potential properties as they want, as long as they can be acquired at 95% valuation or more.

Qualified 1031 Exchange Intermediaries

A key component of a 1031 exchange is working with a qualified, reputable intermediary. As outlined in the timeline above, the intermediary will play an integral role in moving and holding funds securely so that capital can be moved from the sale of one property into the investment of another without any tax implications.

In the sale of a property, proceeds from that sale remain taxable unless they’re passed through an intermediary. The funds cannot be disbursed directly to the seller and be eligible for the tax breaks outlined in a 1031 exchange.

An effective 1031 exchange intermediary oversees all the transactions involved in a 1031 exchange. They need to be able to hold funds in escrow for the sale of first property, and keep them there until it’s time to send funds over for the purchase of the replacement property. The intermediary needs to be a partial third-party, and should not have any formal relationship with anyone involved in the transaction other than facilitation.

What is a Reverse 1031 Exchange?

You may be wondering, “What if I want to purchase a new property before selling my existing investment property? Is the 1031 exchange still a viable option?”

The answer is yes, you can with a Reverse 1031 exchange. However, like with a traditional 1031 exchange, there are some rules you need to consider.

In a Reverse 1031 exchange, an investor can purchase a new property first, but that property must be held by a qualified intermediary until the other property sells. The existing property must be sold within 45 days of the purchase date of the new property, and the deal must be finalized and closed within 180 days of the purchase date.

1031 Exchange Companies

A 1031 exchange can be an advantageous way to transition into a new investment strategy or diversify your portfolio while also benefiting from the tax deferral that helps move more of the sale proceeds into the new property purchase. But the process is intricate and driven by very strict rules that must be met in order to benefit from the tax cut in a 1031 exchange. It’s not a process you want to go into alone or unprepared.

As such, it’s best to approach the 1031 exchange process with the help of skilled professionals who understand the market, know exactly how to move 1031 exchange transactions along smoothly, and can act as trusted advisors during the whole process.

Sands Investment Group has extensive 1031 exchange experience, and can help you navigate all the rules to ensure you make the best choices and obtain the full benefits of the deal. Our client-focused approach, extensive connections, and marketing expertise are just a few of the ways we’re leading the industry. In fact, we’re the fastest growing net lease investment company in America, with over 1,900 transactions in 48 states (to the tune of $4.5 Billion) since 2010.

Want to learn more? Get in touch with an expert today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.

SIG Handles 1031 Exchange on Family Dollar in Corpus Christi

SIG brokers handled a 1031 exchange transaction for a client who needed an investment property to purchase in the Discount/Dollar Store niche.

Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, SIG lead broker Todd Lewis and co-broker Elan Sieder were able to successfully complete a 1031 exchange deal for an investor client purchasing a Family Dollar NNN.

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