Tenant Description

Chase Bank, a subsidiary of JP Morgan Chase, provides consumer and commercial banking across 5,200 locations in the United States with deposits of nearly $650 billion as of June 2010. Their typical lease is for a term of 15-20 years with four (4) renewal options at five (5) years per option. Their cap rates are customarily in the lower range of theose in the global net lease world; a by product of their high credit and class A real estate requirements. The typical Chase lease provide for rent growth, with 10% increases every five (5) years as the standard schedule. From a Realty perspective, Chase utilizes 7 different prototypes, depending on location and available site dimensions, with the bank branches spanning from 3K to 4K square feet situated on 0.5 to 1 acre MOL of land. While Chase prefers to own their locations, when a new site is opened as part of a lease agreement, they will retain ownership of the improvements through the utilization of a long term ground lease.

Real Estate Summary

Under Construction.

Pros
Cons
  • Industry-leading investment-grade credit
  • Compressed cap rates due to high investor demand
    		•
  • Rental escalations in base term
  • Generally high rental rates PSF that could prove hard to replace in the event 7-Eleven vacates
    		•
  • Low price point relative to similarly strong investment-grade tenants
  • Investor unable to depreciate improvements in ground-leased locations
    		•
  • Predominantly Absolute to Modified NNN ground leases with zero to limited landlord responsibilities
    		•
  • Widely considered "recession proof"
    and "Amazon proof"
    		•
  • Industry-leading market share and track record of profitability
    		•
  • Predominantly corner locations in urban markets with excellent demographics and population density
    		•
  • One of the lowest relocation rates in the net lease industry
    		•

    Development Criteria Highlights

    • 50,000 +/- square feet of Land
    • Corner or corner wrap w/signage on two major streets.
    • Signalized intersection.
    • Ability to build up to 4,000 sq. ft.
    • Parking to meet all applicable codes.
    • Ability to build to a minimum height of 23’4″.


    Average Cap Rate
    4.27%
    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated quarterly)
    Credit Rating
    BBB+
    Baa1
    Standard & Poor's
    Moody's
    Company Snapshot
    Company Name

    McDonalds Corp.
    Ownership Type

    Public
    Stock Symbol

    NYSE:MCD
    Headquarters

    Oak Brook, IL
    Locations Worldwide

    37,000+
    Locations in the U.S.

    14,000+
    Website

    mcdonalds.com
    Average Property & Lease
    Sales Price

    $1,721,828
    Annual Base Rent

    $73,148
    Annual Rent PSF

    $15.89
    Building SF

    4,603
    Price PSF

    $374
    Lot Size

    1.15 Acres
    Ownership Interest

    Fee Simple Land
    (Ground Lease)
    Lease Structure

    Absolute NNN
    Lease Term

    20 Years
    Escalations

    10% Every 5 Years
    Guarantor

    McDonald's Corp.
    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated quarterly)
    Request More Information