BIG BEAR LAKE – Big Bear Country Kitchen, a national tenant in business for over 80 years, is up for auction on January 23, with a 15 year absolute net lease for $450,000.
The absolute net lease agreement allows the owner to collect an annual $99,000 net operating income. Country Kitchen will be responsible for all property related expenses including the rent, taxes, insurance, and building maintenance.
According to listing agent Global Realty Capital, Big Bear Lake has seen tourist interest surging to pre-pandemic levels. Over 1 million visitors came to the city in 2021.
This interest has led to a stronger hospitality market, with the average daily rate for hotel rooms up 11.7% annually to $125. Revenue per available room (RevPAR) is up 16.4% to $86 in the five-mile area surrounding the property.
Absolute Net Lease
The sale of the Country Kitchen, located at 39904 Big Bear Blvd, does not include the business – the acquisition is for an absolute net lease.
Absolute net leases require no landlord responsibility for expenses, making them attractive to investors who desire a passive income stream. While other expense structures require the landlord to pay for some or all the building expenses, absolute net leases require the tenant to pay these expenses directly.
Global Realty Capital lists the property as 5,550 square feet, sitting on a 1.2 acre lot. This is fifteen minutes away from the Big Bear Airport. The 15 year lease agreement allows for a 10% rent increase every five years and three 5-year options to extend the lease.
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Cap rate for the investment is not provided.
A lower cap rate is generally associated with a safer or less-risky investment, while a higher cap rate will be associated with more risk. Many advisors feel that a high cap rate is better, or that a good cap rate is between 5% and 10%.
Country Kitchen is a brand name franchised restaurant chain, located in several states. Country Kitchen serves breakfast, lunch, and dinner. The owner of the subject property is the Southern California franchisee with currently 5 operating units.
The Big Bear location has 8 hotel rooms on the upper floor that rent at an average $160 per night.
The franchise group also owns and operates other brand name entities including Taco Bell. According to the listing agent, all restaurants are profitable and no stores have ever closed.
Interested buyers must register on the Ten-X auction website to participate in the auction, scheduled for January 23 – 25.
The auction company requires the buyer to upload a proof of funds document. The proof of cash or cash equivalents (Liquid Funds) must show the amount of the anticipated maximum bid for each sale. Liquid Funds must be available immediately without restriction.
The auction company charges a 3% transaction fee for properties that sell for under $3 million.
For more information about the Big Bear Country Kitchen net lease auction visit https://www.ten-x.com/listing/39904-big-bear-blvd-big-bear-lake-ca-92315/1000017124/?goToDocumentVault=true