ALEXANDRIA, La. – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of a single-tenant net-leased investment occupied by a 2017-construction Wendy’s drive-thru restaurant situated in the central business district of Alexandria, Louisiana. The purchase price represented a cap rate of 5.39%.
Hanley Investment Group’s Executive Vice Presidents Jeff Lefko and Bill Asher, in conjunction with ParaSell, Inc., represented the buyer, a private exchange buyer based in Southern California. The seller, a local investor from the Alexandria area, was represented by Matt Kramer of Pegasus Investments Real Estate Advisory Inc.
“We negotiated a quick 21-day due diligence period in order to fulfill the buyer’s 1031 exchange requirement,” said Lefko. “The buyer was trading out of multi-tenant retail and wanted to acquire a high-quality, stable asset that was successful during COVID and would require very little to no management.”
With over 70% of its business done at the drive-thru pre-COVID, Wendy’s is one of the best-positioned tenants in the industry to handle the changes posed by the COVID-19 pandemic, Lefko noted. “Wendy’s is open and operating, and sales have remained stable. The tenant has paid full and timely rent every month since the pandemic started. In fact, store sales have increased year-over-year, including the lockdown in spring 2020,” added Lefko
Located at 4015 Jackson Street in Rapides Parish, this 2,785-square-foot, net-leased investment situated on 0.96 acres features a long-term, absolute triple-net lease with scheduled rent increases every ﬁve years throughout the base term, offering investors long-term security and a rent increase schedule hedging against inﬂation, according to Asher.
“The property is strategically located at the epicenter of Alexandria’s central business district, beneﬁtting from strong traffic counts of 29,000 vehicles per day and surrounding retail density,” Asher commented. “The location’s continued sales success following more than 27 years of historical occupancy led to a recent $400,000 investment by the tenant to remodel the property to the latest Wendy’s restaurant prototype, a testament to the tenant’s dedication to the real estate and commitment to the business for years to come. Furthermore, the property is uniquely positioned to thrive in the COVID-19 environment as a drive-thru site.”
Wendy’s President and Chief Executive Officer Todd Penegor recently stated in its 2020 fourth quarter earnings news release, “We accomplished a lot in 2020, including securing our position as the #2 QSR hamburger restaurant chain in the U.S., achieving our two highest quarterly Global same restaurant sales results in over 15 years, launching our highly successful breakfast daypart, more than doubling our digital sales, enhancing our restaurant economic model, and continuing to enhance access to our brand with net new restaurant development.”
Wendy’s also reported that the first quarter sales are off to a strong start. Through the week ended February 21, year-to-date U.S. same-restaurant sales increased approximately 6%.
Located in the heart of Louisiana, Alexandria is quickly emerging as one of the nation’s best places to start a business, raise a family, and explore the great outdoors. Established in the early days of America in 1749, Alexandria boasts a 2020 population of 45,808, is the 9th-largest city in Louisiana and is the parish seat of Rapides Parish in Louisiana. It lies on the south bank of the Red River squarely in the geographic center of the state. The Alexandria metropolitan area (population 153,922) encompasses all of the Rapides and Grant parishes.
Alexandria beneﬁts from its scenic location and Cleco, Procter and Gamble, Union Tank Car, and Dresser Valve Works are just a few of the large corporations that have chosen to call Central Louisiana home. England Air Force Base was successfully converted to England Industrial Airpark, now home to many manufacturing and technology companies. The center is a beacon for the region’s economic development.
“Today’s investors are focused on market and retailer fundamentals, corporate long-term leases, and essential service types of retailers, specifically those with drive-thrus. New construction quick-service restaurants with a drive-thru location like this Wendy’s, will typically trade at a premium price as investors look to trade out of management-intensive real estate assets and/or areas that have had more restrictive business practices,” Lefko noted.