Is this Steak ‘N Shake at the Fox Valley Mall in Aurora Ill a good 1031 exchange? The 1031 Doctor™ gives this deal a “thumbs up”!
Steak n Shake has come a long way since their humble beginnings in 1934; this chain was one of the original steak burgers in the country and made their expansion along the famous rout 66. Today, the company is pioneering the industries use of beef tallow fried products which is said to be the healthiest fat for deep fried foods. Their same-store sale has increased double digits because of this bold move and it’s hopeful the industry will follow their lead.
While Steak ‘N Shake continues to increase their same-store sales, the Rent versus Sales figures will continue to decrease, making the tenants decision to remain at this location an easy one. When you’re looking at deals where the primary term is coming to an end you have to be very careful or you could wind up with a vacant sit-down restaurant and most second generation deals like this will be get scrapped and rebuilt from ground up, unlike fast-food drive thru deals that can be simply remodeled.
The reasons I like this deal are as follows.
1. Outparcel to major mall with all the right tenants.
2. Great “going in” cap rate of 8%.
3. Several major hospitals in the area make this deal better.
4. Very high-income area gives the land residual value.
5. Drive Thru ready
6. Stable tenancy with two options to extend.
7. Low price point.
I Grade this deal a solid B to B+ If you’re in a 1031 exchange and need assistance with due diligence or analysis, or you need brokerage assistance, feel free to reach out to me @ jordan@1031doctor.com, or visit our website www.1031doctor.com We can do a quick check up for you on any deal for $299.00 with a 24-hour turnaround. https://irs.gov https://loopnet.com