Aug 16, 2022

Blue West Capital Arranges Sale of Freddy’s Frozen Custard & Steakburgers Portfolio in Denver MSA for Record Low Cap Rate

DENVER, CO - [August 16, 2022] – Blue West Capital has completed the sale of two single tenant Freddy’s Frozen Custard & Steakburger sale leaseback properties in the Denver MSA for $6,268,888. The properties sold for a 4.30% cap rate, the lowest cap rate ever recorded for a Freddy’s property according to CoStar. The properties closed within twenty-two days of being under contract to an all-cash purchaser.

Zach Wright, of Blue West Capital, exclusively represented the seller and purchaser in the record transaction. The seller was a Freddy’s franchisee based in Denver and the Midwest. The seller was a private investor based in the West.

The portfolio was comprised of the below properties:

  1. 11140 South Twenty Mile Road, Parker, CO - $3,368,888
  2. 2300 Coalton Road, Broomfield, CO - $2,900,000

Both Freddy’s Frozen Custard & Steakburger properties feature new fifteen-year triple net leases with no landlord responsibilities. The leases include 10% rental increases every five years. Both locations have proven operating histories with strong store sales. The leases are guaranteed by an entity encompassing all sixteen Freddy’s locations in the Denver MSA. Freddy’s has approximately 450 locations and ranked as the eighth Fastest Growing Chains in the U.S., according to Technomic.

Both the Parker and Broomfield properties are well-located in affluent communities with average annual household incomes within five miles of $139,000 and $131,000, respectively. The Parker location is a strategic Target outparcel, while the Broomfield location is across the street from the FlatIron Crossing Mall.

“Quick-service restaurant properties in major MSAs, such as Denver, with long-term leases and proven operating histories are amongst the most sought-after single tenant investments. We received substantial investor interest allowing us to transact for a record cap rate,” stated Zach Wright, Director & Partner.


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