NNN Carl's Jr. for Sale
Triple net lease (NNN) properties continue to attract investors seeking consistent returns with minimal management responsibilities. In a typical NNN lease, the tenant pays for property taxes, insurance, and maintenance, relieving landlords of most operational burdens. This structure is especially appealing for those focused on passive income or involved in a 1031 exchange.
Among the brands gaining attention in the net lease market is Carl’s Jr., a long-standing fast-food chain with hundreds of franchised locations across the U.S. Investors looking for dependable commercial real estate with strong tenant performance and favorable cap rates are beginning to explore Carl’s Jr. restaurants as an excellent investment opportunity. more frequently.
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Carl's Jr. at a Glance
Carl’s Jr., part of the CKE Restaurants Holdings portfolio, has established a robust market presence, particularly in the Western and Southwestern U.S. The brand is widely recognized for its drive-thru operations, breakfast offerings, and iconic advertising. With a franchise-first model, the company continues expanding through third-party operators, which presents both advantages and risks for real estate investors.
Why Investors Consider Carl's Jr. NNN Properties
1. Attractive Cap Rates
Carl’s Jr. NNN properties typically offer cap rates ranging from 5.25% to 6.50%, depending on location, lot size, year built, lease term, whether the subject property is located on an outparcel of a shopping center, or whether the franchisee owns the property fee simple or on a ground lease. This is relatively high compared to national QSR lease’ lease types like Chick-fil-A or Starbucks, which trade closer to 4.00%–5.00% cap rates due to corporate guarantees.
A higher cap rate means better cash-on-cash returns, particularly valuable for 1031 exchange investors who seek to maintain or improve income streams.
2. Absolute NNN Lease Structure
Many Carl’s Jr. locations operate under absolute NNN leases, meaning the tenant is responsible for all operating costs, including roof, structure, and parking lot repairs. For landlords, this translates into truly passive ownership with virtually zero landlord responsibilities. Properties with absolute NNN leases are ideal for out-of-state investors or those looking to reduce active involvement in property management.
3. Franchisee-Backed Security
Most Carl’s Jr. locations are franchised rather than corporate-owned. While this can be seen as a risk (due to varying franchisee creditworthiness), strong multi-unit franchisees often provide personal guarantees and longer-term leases. In many cases, investors receive detailed financials on the operator, allowing for proper due diligence.
Lease Terms to Know / Common Property Features
Typical lease structures for Carl’s Jr. NNN assets include:
- 10 to 20-year initial lease terms
- 5%–10% rental increases every 5 years
- Multiple 5-year renewal options
Absolute NNN format or occasionally double net (NN), with landlord responsible for structure or roof
Investors should confirm whether the lease is corporate-guaranteed or franchisee-backed, and evaluate tenant credit, operational history, and lease language closely.
Carl’s Jr. NNN properties are usually:
2,000–3,500 sq. ft. freestanding building size
Located on hard corner lots or high-traffic retail corridors
Include drive-thru lanes, which are essential for QSR success
Positioned near complementary retailers such as gas stations, banks, and grocery-anchored centers
Drive-thru operations have become a necessity for fast food tenants post-COVID, and drive-thru capability significantly enhances a property’s value and tenant durability.
Investment Strategies
1. 1031 Exchange
Because Carl’s Jr. properties meet IRS requirements for “like-kind” replacement, they are a great option for investors conducting a 1031 exchange. The typical price range—$1.5M to $3M—fits well for those exchanging small multi-family or other single-tenant retail assets.
2. Diversification Tool
Investors with a portfolio concentrated in corporate-guaranteed tenants may look to Carl’s Jr. NNN assets to enhance yield and NOI while still maintaining lease stability. Targeting franchisee-backed NNN deals can be a strategic way to achieve a better blended return across multiple holdings.
3. Cash Flow Optimization
For those prioritizing steady cash flow over appreciation, the 6.00%+ cap rates on Carl’s Jr. stores can outperform similar fast-food real estate in today’s low-yield environment.
Risks to Consider
- Franchisee default risk – Evaluate operator financials carefully.
- Lease rollover – A short remaining lease term with no option periods can hurt resale value.
- Regional saturation – Some areas may have too many Carl’s Jr. stores or competing QSRs like Hardee’s nearby.
Mitigating these risks requires strong due diligence, a qualified buyer’s broker, and, if possible, lease modification negotiations pre-closing.
Conclusion: Is Carl's Jr. Right for You as a NNN Investment?
Investing in Carl’s Jr. NNN properties can be a smart move for net lease investors who seek a balance of attractive cap rates, rent increases, passive income, and tenant consistency—especially within growth-oriented states like California and Texas.
While franchisee-backed leases may pose slightly higher risk compared to corporate leases, savvy investors who perform proper due diligence often find superior returns in this asset class. Properties with absolute NNN leases, regular rent increases, solid drive-thru layouts, and long-term franchisees can offer durable income streams and portfolio diversification.
Questions about NNN Properties for Sale?
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Contact us today to learn more about how we can help you achieve your investment goals.