How Burger King can survive ?

[Carlos Ptriawan]

I always wondering , how NNN leaseholder or burgerking can survive in expensive location ? They have to sell five dollar buggees either the rent is $800 ppsf or $50 ppsf.

how do they make money ? Also how to determine NNN ppsf if residential in the area is rising 30% more than 1k ppsf ?

[John McKee]

Burger King is a dying brand and doesn't generate the sales like they used to. So yea eventually they won't be able to afford to pay the rent. NNN properties are valued on many factors but none of them are related to residential. A lot of NNN lease locations were signed decades ago with 10% bumps every 5 years so as long as they keep renewing their options and if their sales are steady both the landlord and tenant will be fine. Generally speaking these restaurants look at real estate as a fixed cost or at least needs to be in a certain range/percentage of their sales. The length of lease, market income, strength of tenant, and sales data, are just as important as the location when evaluating these assets.