Nov 23, 2022

Blue West Capital Arranges Sale of Freddy’s Frozen Custard & Steakburgers Property in St. Louis MSA

LAKE ST. LOUIS, MO - [November 23, 2022] – Blue West Capital has completed the sale of a single tenant brand-new construction Freddy’s Frozen Custard & Steakburgers property located at 1021 Southern Ridge Lane in Lake St. Louis, MO for $3,281,000.

The property sold for a 4.80% cap rate, the 8th lowest cap rate ever recorded nationally for a Freddy’s Frozen Custard & Steakburgers property according to CoStar. The Lake St. Louis property is the fifth Freddy’s property sold by Blue West Capital this year. In the past three months, the company also sold the 1st, 2nd, 3rd, and 4th lowest cap rates ever recorded nationally for Freddy’s Frozen Custard & Steakburgers properties according to CoStar.

Zach Wright and Brandon Wright, of Blue West Capital, exclusively represented the seller in the transaction. The seller was a Midwest-based developer and the purchaser was an all-cash California-based 1031 exchange investor.  

The Freddy’s Frozen Custard & Steakburgers property features a new fifteen-year triple net lease with no landlord responsibilities. The lease includes 10% rental increases every five years. The lease is guaranteed by the 3rd largest Freddy’s franchisee. Freddy’s has approximately 450 locations and was the eighth Fastest Growing Chain in the U.S., according to Technomic.

The property is in St. Charles County which is the wealthiest county in Missouri, the third largest county in Missouri, and one of the fastest growing counties in the U.S. The all-brick brand-new construction property is located immediately south of Interstate 64 in a regional retail destination that includes Walmart Supercenter, Lowe’s, Target, Schnucks, Dierbergs, ALDI, T.J. Maxx, and many other national and local retailers. The surrounding area features average annual household incomes of $143,000 within one mile of the property.

“Demand for STNL properties has pulled back as the 1031 exchange investor pool dries up. The Blue West Capital platform has an extensive track record of assisting owners of Midwest net lease properties sell for aggressive prices and terms. This transaction is another example of our ability to bring aggressive Western-based capital to a Midwest property,” stated Zach Wright, Director & Partner.

“QSR properties with long-term leases and strong real estate fundamentals are amongst the most sought after net lease investments,” added Brandon Wright, Associate. 

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