Del Taco Properties Go in $24M Sale-Leaseback

A 15-property Del Taco restaurant chain portfolio entered into a sale-leaseback deal with 20-year absolute Triple Net leases. The $24 million sale includes sites built between 1998 and 2002 in Arizona, California and Nevada. Richard Walter and Dennis Vaccaro of Irvine, Calif.,-based Faris Lee Investments represented the buyer, Innovative Property Partners, LLC, et al., a group of investors based in Orange County, Calif. who were in a 1031 Exchange. Del Taco Corp., which represented itself in the transaction, executed 20-year absolute NNN leases with the buyer and will continue to operate the properties. Del Taco Corp. was interested in a quick sale of the properties and the sale was closed in 45 days, which also met the needs of the 1031 buyer, a Faris Lee spokesman said Faris Lee is currently seeking other sale-leaseback opportunities to match buyer needs with niche opportunities. With its network of active 1031 investors, Faris Lee seeks to provide better pricing in leaseback structures versus typical funds. On Aug. 19, CPN reported that the pace of net lease investment sales may be slower than it once was, but that deals are getting done despite problems with the debt markets and the wider economy. In fact, problems with debt are spurring some pockets of activity in the business – particularly sale-leaseback transactions, Andrew Sandquist, senior vice president in the Oak Brook, Ill., office of CB Richard Ellis Inc., told CPN.“About 75 percent of our business is sale-leaseback. I’m sometimes asked, ‘how’s your business’, and I say ‘phenomenal.’ For the first six months of this year, we were even with the first half of last year. A large part of that is sale-leaseback deals. There’s always a need for capital. Banks have tightened up, and so the sale-leaseback option is more attractive than ever,” Sandquist told CPN. Faris Lee Capital, the financing arm for Faris Lee, coordinated and placed the financing for the buyer who was attracted to the long-term leases and well located properties.