Retail Dining Developments

Dallas REIT buys three Sonny's BBQ restaurants in Orlando, part of portfolio

Seven Sonny's BBQ restaurants in Florida were bought this week, including five in Greater Orlando.

UPDATED: December 30, 2016 5:14 PM — An affiliate of Dallas-based Spirit Realty Capital paid more than $8.36 million on Wednesday for three Sonny's BBQ locations in Greater Orlando, part of a portfolio acquisition of seven Sonny's locations in Florida totaling $19 million.

The Orlando sites include 310 S. Alafaya Trail (in Waterford Lakes Plaza), 7423 S. Orange Blossom Trail (just north of the Florida Mall), and 7055 S. Semoran Blvd. (north of Orlando International Airport).


The other four included two restaurants in Gainesville where the chain was founded in 1968, one in Sanford (3506 S. Orlando Dr.) and one in Oviedo (7460 Dover Garden Lane).

Deeds for the two sales in Seminole County had not been recorded as of Friday morning. No new mortgage was recorded on Friday in relation to the acquisitions.


Spirit Realty Capital is self-described as one of the largest publicly traded triple net-lease REITs in the United States, with a focus on single-tenant, free-standing properties.

The REIT now has 22 properties in Greater Orlando, with close to $50 million invested in the market, investor relations director Pierre Revol told GrowthSpotter. It's a small portion of roughly 2,700 properties owned nationwide.

"We love Orlando as a market, and in this specific transaction we're supporting a proven Sonny's BBQ franchisor," he said. "We like franchises we think will expand like Sonny's, and in doing this we want to become the first call for any new Sonny's deal."

Retail makes up 87 percent of Spirit Realty's assets, with Florida its second highest state for rental revenue after Texas, contributing 6 percent of normalized rental revenue.

Spirit signed a 15-year NNN lease through the end of 2031 with rent escalators for all seven properties with Duval BBQ Management out of Ocala, with potential extensions for up to 20 more years after.

The seller was Winter Park-based Sonny's Franchise Company, which had invested just over $2.8 million in its purchase of all three Orlando sites dating back to 1996, a value not including further construction or renovation costs.

Looking forward, Spirit Realty told investors earlier this year it planned to execute $250 million in net acquisitions in 2017. Revol couldn't comment on specific target markets, but said the company likes Orlando, and tries to grow its footprint with franchisors after establishing partnerships.

"It's a common strategy for many of our franchisees to pursue the monetization of restaurant properties," said Sonny's Franchise Company late Friday via email. "Spirit Realty Capital is an impressive name in real estate investment and our partners are excited to work with them."


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