Owning commercial real estate within the restaurant industry can be a strategic investment with numerous advantages. At Millcreek Commercial, we consider it our mission to find you premium commercial properties with low barriers to entry. In Herriman, Utah, Seven Brothers, a bustling QSR burger joint, exemplifies the perks and benefits of such an investment. Click here to view this listing.
Stable Income Streams
Commercial real estate in the restaurant sector offers stable and consistent income streams. Seven Brothers, strategically located in Herriman’s burgeoning neighborhood, has established itself as a go-to spot for locals and visitors alike. Its popularity ensures a constant flow of customers seeking their delectable burgers and unique dining experience. This consistency translates to reliable rental income for property owners, providing a sense of financial security and stability. Since 2009, Seven Brothers has experienced rapid growth, with franchise opportunities now available in Utah, Arizona, and Idaho. They currently have four locations in Hawaii, one in Arizona, and soon to be four in Utah.
The foot traffic generated by Seven Brothers is a testament to its market appeal. Its premium location along Mountain View Corridor (25,000 ADT) and 12600 S (30,000 ADT) draw not only local residents but also tourists, guaranteeing a steady stream of revenue. This sustained popularity positions the property as an attractive investment opportunity, ensuring a dependable income source for the landlord.
According to Emily Durham, senior vice president, brokerage, food and beverage advisory at commercial real estate company JLL, demand on the restaurant real estate side is “through the roof.” In Houston, for example, there is only a 4% commercial vacancy rate. There is no shortage of people wanting to come to the market.
The Quick Service Restaurant market has experienced sustainable growth throughout the years and is expected to nearly double within the next decade. The global Quick Service Restaurant (QSR) market size was valued at USD 7981.0 million in 2023 and is expected to expand at a CAGR of 8.88% during the forecast period, reaching USD 13296.62 million by 2031 (finance.yahoo.com).
Restaurants often sign long-term leases to secure prime locations. Seven Brothers’ commitment to its location in Herriman is reflected in its long-term lease of 10 years, providing property owners with a reliable and extended rental income. This not only ensures financial stability but also reduces the risk of vacancies, offering a steady cash flow for investors.
The lengthy lease agreement between Seven Brothers and the property owner fosters a mutually beneficial relationship. For the landlord, this translates into a secure and predictable revenue stream, while for the restaurant, it guarantees stability and allows for long-term planning, ensuring continued success in the market.
Investing in commercial real estate in a rapidly growing area like Herriman can lead to substantial property appreciation. Seven Brothers’ presence in this flourishing region contributes significantly to the local economy and community development. As the neighborhood continues to thrive, property values in the vicinity are expected to escalate, making it an attractive long-term investment opportunity for property owners.
The success of Seven Brothers doesn’t just benefit the immediate property but also influences the entire neighborhood’s growth. With more visitors frequenting the area due to the restaurant’s popularity, nearby properties witness increased demand, driving up property values and enhancing the overall investment potential for landlords.
Ability to Re-Tenant
Within the QSR market, these real estate properties are much easier to re-tenant than other properties. Drive-thrus are in high-demand and will continue to be considering the estimated growth of the market. Additionally, QSR properties fit many different types of tenants that could utilize a drive-thru component. An investor can rest assured that in the rare case of a tenant not renewing their lease, finding a new tenant will not be an issue in the QSR market.
Diverse Tenant Base
The restaurant industry inherently attracts a diverse tenant base, enhancing the property’s appeal and sustainability. Seven Brothers’ popularity draws in a wide range of customers, creating a dynamic and vibrant environment for nearby businesses. This diverse foot traffic not only benefits the restaurant itself but also increases the overall desirability and value of the surrounding commercial properties.
Low Maintenance Costs
Unlike some other commercial properties, restaurant spaces often require lower maintenance costs. Restaurants typically have a greater commitment to maintaining its facilities to the highest standards, which minimizes the property owner’s maintenance expenses. The establishment’s focus on cleanliness, regular upgrades, and adherence to industry standards ensures not only a pleasant dining experience but also reduces the burden of upkeep for property investors, leading to a higher return on investment. Our Seven Brothers property features a NNN lease, which means the landlord does not have to worry about any maintenance, insurance, or other costs associated with the property.
Community Engagement and Brand Visibility
A successful restaurant, like Seven Brothers, becomes an integral part of the local community. Beyond just serving food, it actively engages with its patrons and collaborates with nearby businesses. This level of community engagement not only fosters a loyal customer base but also enhances the property’s value by boosting its visibility and reputation within the locality. Owning such a property becomes more than just an investment—it becomes a part of the community’s fabric.
The positive perception and goodwill generated by restaurants extend to the property it occupies, presenting an opportunity for property owners to capitalize on the enhanced brand visibility and reputation.
Owning commercial real estate in the restaurant industry, particularly with a thriving establishment like Seven Brothers in Herriman, presents an array of benefits—from stable income streams and long-term leases to property appreciation and community engagement. Such investments provide a lucrative opportunity for those seeking a reliable and rewarding venture in the real estate market.
Interested in becoming a part of a growing success story? Explore the opportunity to own the property housing Seven Brothers and reap the benefits of investing in the flourishing restaurant industry. Click here to learn more about the property.