Deal of the Week: What’s a Whataburger Worth? $1.75 Million for This One

A Texas-based private investor has brought the ownership of Whataburger real estate in Plano, Texas, back to the Lone Star State.

The undisclosed investor bought the 32-year-old property from California-based Equitas Investments, a firm that specializes in owning net lease properties, for $1.75 million, according to CoStar data.

“We found the buyer in the first week on the market,” said Jeremy McChesney, senior vice president for Hanley Investment Group in Corona Del Mar, California, and the property’s listing agent.

McChesney said Whataburger stores don’t often hit the market and sell quickly when they do. This is the second one he has sold. The first one in Oklahoma had a buyer a week after it was listed, he said.

Whataburger has 830 locations in 10 states. But Texas is king, since the chain was founded there in 1950 and has its headquarters in San Antonio.

The chain typically signs net leases for the freestanding property. With a net lease, the tenant pays most if not all of the operating expenses on the property. The landlord collects rental income and earns an annual yield, which is known as a capitalization, or cap, rate.

At the Plano location, Whataburger has a few years left on an existing lease with renewal options. The cap rate for the property is listed in CoStar as 5.14%, a fairly low rate given what’s left on the lease.

McChesney said the Plano location is doing $2.4 million in annual sales out of the nearly 2,500-square-foot building. That's a healthy total; McDonald’s stores average $2.5 million to $2.6 million in annual sales.

LoopNet publishes new "Deals of the Week" every other Monday. Click here for the entire series.