Memphis Hooters Sells for Record Cap Rate
- Dec 18, 2017
BayHill Realty Capital has sold a newly opened Hooters restaurant in southeastern Memphis, Tenn., for just under $4 million to Todd and Jeffrey Mathis of Lomboc, Calif. The sale closed at a cap rate of 5.25 percent, which is, reportedly, a record for Hooters properties sold in the last two years nationwide.
Located at 7535 Winchester Road, the building sits on an outparcel of a Walmart and Sam’s Club. Near the intersection of Winchester Road and Bill Morris Parkway, the new Hooters of Memphis S.E. sits in an area with a number of busy retail centers, which include stores and restaurants such as Best Buy, JCPenney and Red Lobster. FedEx’s world headquarters campus is also less than two miles away.
A team led by Chris Lomuto and Milo Spector of Stan Johnson Co. represented the seller in the transaction.
Hooters has signed a 20-year, absolute triple-net lease with the new owner. The property was recently renovated by BayHill and opened as Hooters in late October 2017. The restaurant features an open design with multiple TVs throughout the dining area, following Hooters’ 2017 prototype design. Formerly operated as a Ruby Tuesday, the restaurant closed in 2016 as part of a corporate restructuring plan. Ruby Tuesday subsequently sold the building in June 2017 to developer BayHill for $1.7 million, according to public records.
“This really shows how important it is to assess the quality of the real estate when purchasing a triple net investment,” said Milo Spector, associate director of Stan Johnson Co., in prepared remarks. “This conversion and interest in the site from Hooters corporate shows just how much demand there is for quality sites from operators. This largely has to do with the limited supply of strong real estate locations that are currently available.”
Image courtesy of Hooters