Chipotle is a highly sought after brand. There is great demand for their freestanding stores as net lease investments. The properties are well located near major shopping centers, university and college campuses, and business centers. Chipotle typically features a 2,100 - 4,200 +/- SF building, and are usually situated on 0.43 - 1.55 acres of land. Chipotle net lease properties provide a long-term investment with no property management responsibilities. Generally the lease term is a 15-year NNN Ground Lease with four, five-year options with 7.5-12% increases every 5 years. Chipotle leases are corporately guaranteed. Chipotle's sales growth over the last decade is the highest across the "quick service/fast casual" segments. The chain is growing fast in part because of the rising popularity of Mexican food.

Pros:

NNN lease eliminates Landlord responsibilities

Fast-Casual Restaurant (Fastest growing segment of the restaurant industry)

Lease terms are generally 15 year NNN Ground Lease

Cons:

Non-investment grade credit

Tough competition

Ground leases don't allow for depreciation

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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.

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