Freddy’s — 20-Year Absolute NNN Sale-Leaseback
Second Largest Operator - Income Tax Free State
Marketing description
San Antonio is the second-largest city in Texas and one of the fastest-growing major metros in the country. The South Side, anchored by the I-35 / SW Military Drive interchange and South Park Mall, is the principal retail and employment hub for the city's southern quadrant.
Its economic base is broad and expanding: Toyota Motor Manufacturing Texas anchors a large advanced-manufacturing labor shed (with a $531M plant expansion underway), Texas A&M University-San Antonio is growing enrollment past 7,000 students, and the Brooks and Port San Antonio redevelopment districts continue to add jobs and rooftops. With 231,382 residents and $1.9B in annual consumer spending within five miles, the South Side is a dense, value-oriented trade area well matched to Freddy's price point.
The lease is guaranteed by Lone Star Custard Holdings, LLC, the second-largest operator in the Freddy's Frozen Custard & Steakburgers system. Built by Dallas-raised brothers John, Nick, and Joe DePinto, Lone Star Custard entered the Freddy's system in 2022 and has scaled to 47 restaurants across Texas, spanning the Dallas-Fort Worth, San Antonio, Austin, Houston, Rio Grande Valley, and Corpus Christi markets. With a corporate guaranty from the parent company standing behind the lease, the tenant offers credit depth backed by one of the largest and most established operating bases in the brand.
Co-founded in 2002 by brothers Bill and Randy Simon, along with their friend and business partner, Scott Redler, the three men named the restaurant after Bill and Randy's father, Freddy Simon, a World War II veteran. Today, Freddy's restaurants from coast-to-coast serve a menu reminiscent of the all-American meals Freddy prepared for his family. Freddy's offers a full menu of longtime favorites from steakburgers to sundaes, as well as hot dogs and chicken. Their kitchens prepare all food only after it is ordered to ensure high quality and freshness. Freddy's locations pride themselves on being bright, clean, and efficient, with quick service and ample room for families to gather and enjoy their time together.
Investment highlights
- New 20-Year Absolute NNN Lease
- Strong store sales of nearly $2,200,000 (18% above Freddy's AUV)
- ~7.5% rent to sales ratio
- Direct I-35 frontage with 67,000 VPD at the dominant retail node on San Antonio's South Side
- Operated by Lone Star Custard Holdings, LLC, the second-largest operator in the Freddy's system (47 units)
- Recent 2025 $300,000+ store refresh showing Tenant's commitment to the site
- The property benefits from strong traffic volumes on the I-35 & SW Military Dr interchange carrying 130,000+ vehicles per day combined
- Proximity to Major Retailers at South Park Mall (Macy's, JCPenney, Dick's Sporting Goods, Floor & Decor), the principal shopping destination for the South Side
- Labor anchored by Toyota Motor Manufacturing Texas (3,700+ direct jobs, $531M expansion underway), Texas A&M University-San Antonio (7,000+ students), and the Brooks redevelopment district
- Dense, growing trade area: 231,400+ residents and $1.9B in annual consumer spending within 5 miles
- Lone Star Custard: the Second-largest operator in the Freddy's system, with 47 restaurants throughout Texas
- Brand-new 20-year absolute NNN sale-leaseback with 10% increases every 5 years and 4 5-year options
- Established brand: Freddy's boasts over 580 locations across 37 states
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