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Investors are seeking triple net properties that can generate robust returns, even during market downturns. Another requirement is selecting brick-and-mortar retail properties with the ability to compete with e-commerce as consumers purchase more and more items online. One category of retail property fits these prerequisites to a ‘T’—an auto parts store or business for sale, which may be one of the industry’s best-kept secrets.
Sands Investment Group is pleased to congratulate Chris Sands on being named one of the commercial real estate industry’s top “Retail Influencers” by GlobeSt.com.
From medical offices to strip malls and everything in between, real estate investors are constantly looking for the next investment opportunity to expand their portfolios. There is no shortage of investment opportunities, after all, and nearly every industry needs dedicated investors to help them succeed especially when investing in businesses for sale. As an investor, growing your portfolio and seeing a profit on those investments is undoubtedly important to you. Finding the right investment is key to that success.
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.
Shopping centers can be a great opportunity for commercial real estate investors. They offer variety in tenants, consistent income, and great potential for growth in the future. A shopping center can look very different, depending on the town or city, as well as the types of tenants the center tends to attract. Some may have a lot of chain stores, while others might have mostly local businesses. There may be a mix of retail, grocery stores, clothing stores, and furniture stores. Oftentimes, there can be many moving parts with shopping center investments, as there are usually multiple retail tenants to manage at any given time.
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.
Read more →
Whether you have medical experience or are just interested in investing in medical offices because they can make a great long-term investment, medical office properties can be a great addition to any commercial real estate portfolio. There are so many different types of medical properties that can be an asset—from small offices for private practice to large medical buildings or complexes.
Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, SIG lead broker Gerald Nash, along with co-broker Nick Stockton, was able to secure a buyer for this DaVita property for sale by leveraging the SIG platform, which allowed the client to gain a 13% profit.
Restaurants have become popular investments in recent years as busy consumers choose to dine out more frequently—sometimes more than one meal a day. Examining the growth of the industry by its share of consumers’ food dollar and total sales is impressive. The restaurant industry’s share of the food dollar climbed from 25% in 1955 to 51% now, and total US sales have climbed 53% in the past decade to $899 billion, according to the National Restaurant Association. Currently, there are more than 1 million restaurant locations in the United States.
Nevertheless, the industry was negatively impacted by the COVID-19 pandemic that began in March 2020 and led to the closure of many restaurants due to temporary regulations that restricted inside dining. The restaurant industry’s total sales for 2020 were $240 billion less than the National Restaurant Association’s pre-pandemic forecast for the year. Also, more than 110,000 eating and drinking places were closed for business temporarily, or for permanently, as of December 1, 2020.
The pandemic was challenging for restaurants of all sizes, but the companies that fared better tended to be larger franchises that have outlets throughout the country and feature what is described as omnichannel platforms—restaurants that provide several ways for customers to order, pay, and get their meals. Today, consumers desire a consistent experience, no matter the sales channel they use.
Generally, fast food restaurants were able to pivot quickly and adapt to operating during the pandemic. Many fast food restaurants already featured drive-throughs and online ordering with contactless curbside carry-out.
If you’re interested in investing in small restaurants for sale, buying an existing restaurant property can be an excellent option to become a restaurant owner. You can avoid the difficult early years of getting a restaurant off the ground. As with buying a restaurant franchise, you gain instant name recognition and a built-in customer base. Also, you do not have to create a business plan and menu from scratch. But, in a purchase, you inherit both the good and the bad, and it’s crucial to ask the right questions before investing in restaurant properties.
Questions to ask before purchasing a restaurant property:
This is the most critical question—why does the owner want to sell the restaurant if it is successful? Typically, two main reasons cause owners to sell:
Before you purchase a restaurant, you need to know if it will be a viable business. No matter how much you love that taco place or how successful it seems, you must carefully examine its financials along with the asking price. The due diligence will make you aware of any significant issues from the outset. In fact, if you plan to apply for a small business loan, you must create a detailed outline of the finances for your restaurant business plan.
You and your accountant must scrutinize all the financials, including profit and loss, cash flow statements, balance sheets, bank records, and tax history. Things you should look at include food and beverage sales (monthly and yearly), labor costs, food costs and check averages. Also, look at the cost of utilities, rent, insurance and taxes. Examine existing vendor contracts and the state of any assets (especially equipment) you will be purchasing. Look at the liabilities you would be taking on—to whom will you owe money, how much, and what are the monthly payments?
If an owner refuses to show you the books, do not proceed any further. Anyone serious about selling should provide an accurate picture of the financial health of their restaurant. The owner may ask you to sign a non-disclosure agreement stating that you will not share their information with any other parties.
Restaurant closures are often due to failure to pay sales or payroll taxes. These obligations compound quickly under government penalties, and you want to avoid these types of problems. Other legalities to look for: unpaid wages, customer lawsuits, back rent, health department citations, and more. It may be wise to hire an attorney to review all public records to avoid these issues.
Unless you are already familiar with the restaurant for sale, you should research the area and ask yourself several questions to help determine it’s value and fit within your portfolio. Questions including but not limited to: Is the location advantageous, is it located in a busy area? Is the restaurant in a shopping center or is it standalone? Is it visible enough to attract foot traffic and passing cars? Is there sufficient parking? What is the competition like nearby? Have new restaurants opened that might draw business away? What are the future terms of the lease?
A profitable way to invest in the restaurant niche is to select a quick-service restaurants AKA fast food restaurants for sale, with a triple net lease (NNN). Due to the great variety of fast food restaurants, investors can choose the property they want to invest in based on location, price, and brand. Choosing a name brand also eliminates the risk of a local restaurant having a poor reputation. There are several reasons why fast food restaurants that are available to buy make great NNN investments, including location, drive thru access, type of business and lease length.
There are more than 200,000 fast food restaurants in the US and, according to Brand Z rankings, and 2018 revenue for the top eight fast-food brands was $229 billion. Entrepreneur and QSR Magazine report that McDonald’s, Starbucks, and Subway are among the top fast food restaurant brands. They have continued to perform well during the pandemic with the advantage of drive thru service, making the industry an excellent place to invest. Fifty million Americans dine at a fast-food restaurant every day. Restaurants like McDonald’s, KFC, Wendy’s, and Starbucks are stable long-term net lease investments with reliable, creditworthy tenants, effortless monthly income, periodic rent increases for 10-15 years, and few or no maintenance responsibilities.
Many restaurant corporations depend on triple net (NNN) leases investors to expand and open new locations, which creates a profitable circumstance for both property owners and the fast-food corporations.
NNN real estate provide a bevy of benefits that enable buyers to continue to work, build a portfolio, or enjoy retirement. To make the most of those benefits, look for high-credit companies that choose total control over their properties and brand image without involvement from the landlord. You also want to make sure the investment provides:
In addition to NNN investors, 1031 exchange investors are turning to restaurants as replacement properties because these asset types are easy to understand, and buyers like the familiarity with the brands and the ability to their favorite name brand. In addition, restaurants that are clearly growing are particularly attractive, especially since the typical price point (between $2-$3 million) is perfect for individual investors.
The triple net real estate experts at Sands Investment Group have helped investors close deals on many fast food restaurants, including various locations like:
The trusted advisors at Sands Investment Group can bring more to the table than simply identifying properties for you. We can help with existing real estate assets, acquiring new operators or businesses, developing new restaurants, and working to restructure leases to reduce your costs. We have handled one-off deals and acquisitions of multiple restaurant locations to help you obtain the right restaurant for your portfolio. If you have a different net lease property type in mind, we can help. We’ve handled deals on some of the most popular NNN business types including: car washes for sale, gas stations for sale, and many more.
For more information or to begin finding your next restaurant for sale investment, get in touch with Sands Investment Group experts. These advisors can help identify and secure a great opportunity for investment. Call 844.4.SIG.NNN or send us an email to get started.
Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, SIG broker Amar Goli, along with co-brokers Greg Laughton and Clarissa Tarandy, was able to secure this 1031 exchange deal for a repeat client and demonstrate expertise in the industrial sector to best serve all parties involved.
As investors look into new opportunities for triple net lease properties, one type of business that’s repeatedly mentioned is a gas station. The best types of commercial real estate leases involve relationships with businesses that are recession-proof, meaning they will always be needed regardless of the current economy. Therefore, gas stations are a smart investment opportunity to consider.
Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, SIG lead broker Rahill Lakhani, along with co-broker Susan Annis, was able to sell this Texaco net lease property despite client’s price expectations. Read more →
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 →
Triple net lease (NNN) properties are often very attractive to investors who are seeking out an investment with consistent, equity-building returns without having to be involved in the day-to-day obligations and financial responsibilities of the property. NNN leases are also structured over a long period of time (usually anywhere from 10-25 years) so they can be an opportunity for consistent, long-term earning potential from the investment standpoint.
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.
Investing in commercial real estate can bring about many advantages in the form of low-touch income or a diversified portfolio. But not all commercial leases are the same, and even leases of the same type can have varying factors and deal details. In short, every commercial lease is usually as unique as the property itself, so it’s very important that you understand all the particulars and fine print of any property you’re considering adding to your portfolio.
Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts for commercial real estate in Atlanta. In this deal, lead SIG broker Amanda Reeves and co-brokers Doug Roland, Dan Hoogesteger, and Danny Held successfully closed a CVS transaction despite facing challenges with the age of the listing and multiple instances of the deal falling out of escrow.
Triple net leases are popular options for landlords and tenants alike. They aren’t your standard commercial lease agreement. They give property owners a consistent income stream with more time to focus on other projects, as day to day maintenance is typically passed to the tenant. This gives the tenant more control over the property, allowing them to make repairs when needed and sometimes even update the property as they see fit for their business. The costs associated with the property are split up between landlord and tenant in a different way than most other leases.
Triple net lease (NNN) real estate offers investors a way to secure a consistent revenue stream without having to play all the traditional roles and take on the many obligations of being a landlord. In an NNN lease, the tenant at the property will typically cover the major operational expenses of the property as part of the business expenses. These costs covered by the tenant usually include property taxes, insurance, and maintenance or upkeep on the space they’re renting for their business.
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