Popeyes Tenant Overview
Pros
- No landlord responsibilities
- Rental increases in the primary term
Cons
- Non-investment grade credit
- Franchisee operators
Earnings Highlights
- Comparable sales up nearly 6% in Q4,
- Digital sales grow over 20% year-over-year to $14 billion in 2023, representing over a third of system-wide sales
- Nearly $1.5 billion of capital returned to shareholders in 2023 while investing for growth and reducing net leverage
Tenant Description
Popeyes Louisiana Kitchen, or Popeyes as it is commonly known, is a chain of fried chicken fast food restaurants.
Popeyes was founded in 1972 in New Orleans.
Popeyes is an attractive net lease investment due to their triple net leases with rental increases and their strong locations. Popeyes, like most QSRs, sign triple net leases that relieve the investor of any landlord responsibilities. The leases will typically feature rental increases in the base term every five years or annually, depending on the lease. Popeyes occupies buildings with strong real estate fundamentals, such as good visibility from a highly trafficked road. Their layout is common among QSR tenants, which makes backfilling the property much easier. Nearly all of the Popeyes locations are franchises, making it critical investors evaluate the financial strength of the restaurant operator.
| Average Sale Price | $2,401,235 |
| NOI | $130,904 |
| $/Square Foot | $686 - $1,201 |
| Building SF | 2,000 - 3,500 |
| Lot Size | 0.5 - 1.0 acres |
| Lease Term | 15 - 20 years |
| Escalations | 10% every 5 yrs |
| Stock Symbol | QSR |
| Bell, CA | 4.75% |
| Westchester, PA | 5.00% |
| Farmington, NM | 6.00% |
