Top 5 Steak House Chains Compared in Net Lease Investment Study

OAKBROOK TERRACE, Ill.  (October 4, 2012) – Mid-America Real Estate Corporation’s Net Lease Investment Group recently compiled information comparing net lease data among the top five steak house chains in the country as a service to net lease investors. “We’re constantly asked by clients who the hot tenants are, what lease terms we’re seeing, and what the exit cap rates are,” says Mid-America investment broker and co-author Tom Fritz. “This study shows this information, plus the different financial positions for each of the top five steak house chains currently sold in the market.”

The “Top 5 Steak Houses” include (in alphabetical order): Logan’s Roadhouse owned by RHI, as subsidiary of Kelso Affiliates, Lone Star Steakhouse & Saloon, owned by Lone Star Funds, Longhorn Steakhouse owned by publicly held Darden Restaurants, Outback Steakhouse owned by OSI Restaurant Partners LCC (a subsidiary of Kangaroo Holdings), and publicly held Texas Roadhouse. Financial information on each restaurant was obtained from Yahoo! Finance and all numbers are rounded. The credit ratings were derived from S&P.

“These are the most popular free-standing steak house restaurants based on brand name and number of locations that we are seeing sell in the investment market,” says Mr. Fritz. He says that the chart compares each tenant’s financials snapshot and how cap rates are directly correlated to financial strength and lease terms. “Investors want well-located real estate, a successful business model, and a management-free investment. The strong steak houses offer all of the above, and investors are willing to pay aggressively for them.”

The study is co-authored by Tom Fritz, Bill Wright and Mark Goldberg of Mid-America Real Estate Corp. (Chart available in PDF format at http://www.midamericagrp.com/downloads/SteakHouseComparison_Sept12.pdf.)

Mid-America Real Estate Corporation is a member of Mid-America Real Estate Group, a ChainLinks affiliate. Mid-America Real Estate Group is a full-service retail real estate organization that has become the Midwest’s leader in retail investment sales. For more information, call (630) 954-7300 or visit www.midamericagrp.com.