By: Paul Dionne | Vizzda
Pursuant to the $2.1b sale of its Red Lobster business unit
to San Francisco-based private equity firm, Golden Gate Capital (GGC)—which closed in
January of this year—Darden Restaurants, Inc. has completed the sale of four
Phoenix-area Red Lobster locations for a combined $14,812,514 or $434.51 per
combined square foot. In conjunction with the business unit sale, GGC executed a $1.5b sale-leaseback with American Realty Capital Partners (ARCP)
for roughly 500 of the 700 restaurants it acquired in the purchase of Red
Lobster.
According to a press release issued by ARCP, the
sale-leaseback of approximately 500 Red Lobster locations was completed at a
7.9% cash cap rate or a 9.9% cap rate under generally accepted accounting
principles. The portfolio has a weighted average lease term of roughly 25 years
and 2% annual compounded rent escalations. While Golden Gate’s acquisition of
Red Lobster included the assumption of between $500m and $600m in existing
obligations, the sale of these four locations was on a cash only basis.
The four locations are all shadow-anchored by regional malls
and are located on major arterial intersections in Peoria, Phoenix and Mesa,
where two of the locations are situated. Characteristics of the four locations
are described in the table below:
Address
|
City
|
Shadow Anchor
|
Price
|
SF
|
Price/SF
|
Lease Notes
|
7921 W Bell Road
|
Peoria
|
North Valley Power Center
|
$4,275,160
|
9,032
|
$473.33
|
Retained by Golden Gate Capital*
|
6149 E Southern Avenue
|
Mesa
|
Superstition Springs Center
|
$4,261,517
|
8,411
|
$506.66
|
25 year firm term and four 5-year options to extend
|
1403 S Alma School Road
|
Mesa
|
Fiesta Mall
|
$3,160,633
|
9,413
|
$335.77
|
25 year firm term and four 5-year options to extend
|
2810 N 75th Avenue
|
Phoenix
|
Desert Sky Mall
|
$3,115,204
|
8,204
|
$379.72
|
25 year firm term and four 5-year options to extend
|
Because the Peoria location conveyed from Darden to a
different, GGC-affiliated special purpose entity than the other three
properties and because there was no new lease agreement memorialized at the
time of sale, it is assumed that that location was retained by GGC.
To Contact the Author:
Paul Dionne – pdionne@vizzda.com
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