Penguin Point Quick-Service Restaurant (QSR)

Description:

TENANT HIGHLIGHTS:

Penguin Point currently operates 15 restaurants in Indiana. A 16th location is opening in September 2021, and at least 3 additional locations are planned for the Fall 2021. At least 4 additional locations are planned for 2022.

Since 1950, they have been serving delicious burgers, fries, chicken, shakes, and tenderloin sandwiches. They take pride in their customer service and serving quality food at an affordable price.

Penguin Point began as a carhop drive-in. The first restaurant was opened at the junction of State Roads 13 and 15 in Wabash, Indiana and still operates today as one of the top restaurants. The modern-day company was formed in June 1961.

Penguin Point is famous for its Tenderloin sandwich that was developed in the early 1950s by the company’s founder. Penguin Point has also become widely known in Indiana for fresh chicken, crinkle cut French fries, and their double deck Big Wally sandwich. Quality, variety, and service continue to be their focus for growth.

Corporate Net Sales increased by 22.4% from 2019 to 2020, in the midst of COVID-19.

Corporate Net Sales increased by 23.3% from 2018 to 2019.

INVESTMENT HIGHLIGHTS:

Location: 2326 Edison Road, South Bend, Indiana 46615
(3-5 minutes East of the campus of the University of Notre Dame)

Property Type: Penguin Point Quick-Service Restaurant – Corporate Owned
Drive-Thru, Carry-Out, Sit-Down, Curbside Pickup, Delivery

Investment Type: A Reverse Build-to-Suit Project – New Construction
Absolute Triple-Net (NNN) Lease Investment Property
Zero Landlord Responsibilities

Investment: $ 1,734,500

Single Tenant: Penguin Point Restaurant Group LLC penguinpoint.com

Lease: Tenant will execute a brand new 20-year Absolute NNN Lease at Closing

Monthly Base Rent plus Quarterly Percentage Rent based on Sales

Monthly Base Rent begins at Closing

General Contracting & Construction Management by SFV Services sfvservices.com

Opening November 2021

1st Year Projected Sales: $ 1.2 Million

Building: 2,000 SF

Land: 0.4 Acre

Investor Ownership: Fee simple (land and building)

RETURNS ON INVESTMENT:

Investment: $ 1,734,500

1st Year Annual Base Rent: $ 112,746.84
1st Year Monthly Base Rent of $ 9,395.57 begins at Closing

Annual Base Rent Increases: 1.5%

In addition to the Base Rent, the Investor will receive Percentage Rent in the amount of 2.0% of Net Sales - based on a floor of $ 1,000,000 Annual Net Sales and a cap of $ 1,500,000 Annual Net Sales.

Annual Percentage Rent based on a floor of $ 1,000,000 Annual Net Sales = $ 20,000
Annual Percentage Rent based on $ 1,200,000 Projected Annual Net Sales = $ 24,000
Annual Percentage Rent based on a cap of $ 1,500,000 Annual Net Sales = $ 30,000

With the Base Rent and Percentage Rent, the Cap Rate will be:
Minimum Cap Rate: 7.08%
Cap Rate Based on Projected Sales: 7.19%
Maximum Cap Rate: 7.36%

With the Base Rent and Percentage Rent, after the first 12 months of operations, the Investor’s rate of return will be:
Minimum: 7.70%
Based on Projected Sales: 7.93%
Maximum: 8.28%

The Investor’s rate of return will increase due to the Annual Base Rent increases of 1.5%

Documents: