Fort Lauderdale, FL – Calkain Companies has sold two Florida Dairy Queens, both of which went under contract within weeks of marketing.
The key was pricing them at a 6.00% cap,” said Doug Aronson, Managing Director in Calkain’s South Florida office.
“Investors have certain expectations these days of getting a more favorable yield, but given the increase in interest rates they can’t always find it. Fortunately, though, we were able to negotiate based on term and yield expectations.”
Aronson, in consultation with his seller, a two-unit Dairy Queen operator in Florida’s panhandle, structured a 15-year NNN sale leaseback with 2% annual increases. He priced one property in Tallahassee at a 6.00% cap and the other in rural Marianna, FL at a 6.10% cap.
“In South Florida, cap rates of 4-5% are almost the norm,” said Aronson. “These properties, however, are in smaller markets so we had to give investors reason to take notice. We had significant activity and very few buyers were concerned about the guarantor’s strength. For these investors, 15-year NNN deals with a national brand that could be purchased at or close to a 6.00% cap were appealing,” he continued.
The properties in Tallahassee and Marianna, FL traded at $1,825,000 (6.10% cap) and $1,615,000 (6.15%) respectively. The transactions closed at nearly full ask price.
Calkain Companies is a commercial real estate brokerage firm which specializes in assisting buyers and sellers with single and multi-tenant net leased properties through all aspects of the transaction including advisory, brokerage, debt placement, equity placement, asset management and research. Calkain has a national platform with multiple office locations throughout the entire East Coast. Additional information about the firm and listings may be found at calkain.com.