Taco Bell typically features a 2,000 – 3,000 +/- SF building with a drive-thru window, situated on .5 - 1.0 acre of land. It is important to note that Taco Bell franchises the majority of its locations. There are a number of various lease agreements and guarantors operating under the Taco Bell banner. As a result, lease terms vary as do cap rates based on the size and strength of the operator and sales at a particular location. Generally the lease term is 20 years with 4 five year options with increases of 10% every 5 years.
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Pros:
- Higher cap rates available
- Engaged in heavy advertising to improve brand image and market penetration
- Often new favorable NNN leases with good increases
Cons:
- Non-investment grade credit
- Must look closely at performance of franchisor across all locations
- Must review sales history at subject location
- Not all leases require sales reporting
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
