Freddy's - Corporate Guarantee - St. Louis. MO MSA
Top 10% Nationwide | 2023 Construction | 12-Yr Absolute NNN Lease
Marketing description
Marcus & Millichap, as exclusive advisor, is pleased to present the opportunity to acquire a 100% fee simple interest in a brand new, freestanding Freddy’s Frozen Custard & Steakburgers located at 5570 Belleville Crossing Street, Belleville, Illinois 62226 (St. Louis MSA).
This ±3,000 square-foot quick-service restaurant with outdoor patio and drive-through was purpose-built for Freddy’s and represents a rare opportunity to acquire a newly constructed, corporately backed, single-tenant net lease asset with long-term income security in one of the St. Louis Metro East’s most active retail corridors.
The property is 100% occupied on a 15-year initial lease term commencing March 8, 2023 and expiring March 31, 2038, with three (3) additional five-year option periods extending the potential lease term to 30 years. The lease is fully guaranteed by Freddy’s Frozen Custard LLC, the corporate entity of Freddy’s, representing a rare opportunity to own a location with additional credit support beyond a typical franchisee lease.
The subject property is a top-performing location within the Freddy’s system, generating strong unit level financials, ranking #1 in Illinois and within the top 10% nationally (via Placer.AI).
The lease is structured as absolute triple net (NNN), with the tenant responsible for all taxes, insurance, and maintenance, offering a truly passive investment. The lease features 10% rent increases every five years throughout the initial term and option periods, providing consistent income growth, and low rent compared to sales.
Freddy’s Frozen Custard & Steakburgers was founded in 2002 in Wichita, Kansas, and has grown to 580 locations across 36 states. The brand is backed by Rhone Group, a global private equity firm with approximately $11 billion in assets under management. Freddy’s occupies a differentiated position in the quick-service sector by combining made-to-order steakburgers with freshly churned frozen custard and continues to expand nationally through both corporate and franchise growth.
Investment highlights
TOP-PERFORMING UNIT
- #1 Freddy’s location in the state of Illinois (via Placer.AI)
- Top 10% performing store Nationally
- Strong unit level financials
- New 2023 Construction
PRIME RETAIL CORRIDOR LOCATION
- Located within Belleville Crossing retail corridor (2.4m Annual Visits)
- Shadow anchored by Target and Home Depot
- Approximately 26,000 vehicles per day
- Strong visibility and accessibility along IL-15
LONG-TERM CORPORATELY BACKED LEASE
- Lease fully guaranteed by Freddy’s Frozen Custard LLC
- 15-year initial term (expires March 31, 2038)
- Three (3) five-year renewal options (up to 30 years total)
- Absolute NNN structure (zero landlord responsibilities)
SCHEDULED RENT GROWTH
- 10% rent increases every five years
- Next increase in March 2028
- Continued escalations throughout option periods
- Built-in inflation hedge and income growth
BRAND NEW PROTOTYPE
- Strategically designed for high-volume drive-through operations
- New designated digital pick-up area
- Enhanced kitchen layout
- Transformed bagging location
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