Deal analysis - Thoughts on two NNN single tenant properties

[John Chen]

Hi Everyone. I'm trying to learn more about analyzing commercial properties so wanted to get the community's thoughts on the following 2 NNN single tenant properties:

I understand both properties have low cap rates but I'm hoping to get pass that point and actually analyze the other components of the deals

Deal 1:

• Location: Vacaville, CA.  Pop 100k, anchored by Outlets, several big box stores, off exit ramp for interstate 80 (186k traffic daily)
• Lease terms 20 years (new)
• Rent increase: 10% every 5 years
• Price: $2.35M
• Cap: 5.62% (may be possible to go to 5.8%)
• Tenant: Popeyes
  
• Operator: 17-Unit Franchisee founded in 1972, 14 years of operating in this property location
• Year Built: 2004
• Gross Leaseable Area: 3754 SF
• Lot Size: 0.64 Acres
  

Deal 2:

• Location: Santa Cruz, CA. Pop 100k, near University (UCSC), anchored by safeway and a few retails, on major road for the city (27k traffic daily)
• Lease terms: 19 years left
• Rent increase: 1.75% after year 7
• Price: $2.47M
• Cap: 4.5% (may be possible to go to 4.75-5%)
• Tenant: Burger King
• Operator: 65-Unit Franchisee 
• Year Built: 1978
• Gross Leaseable Area: 1971 SF
• Lot Size: 0.51 Acres

Any thoughts on anything interesting? Any red flags or points of interest? What other key info is missing (ie Store sales), and once obtained them, how would you analyze the data?

Thanks again!