Dining Out
Dec 1, 2006 12:00 PM
GE Capital gobbles up restaurant REIT.
Two trends converged in early November with the announcement of the proposed $3 billion acquisition of Trustreet Properties, a net lease REIT that specializes in restaurant properties, by the Franchise Finance division of GE Capital Solutions.
The deal underscores the increasing cachet of restaurants within the net lease world and Trustreet joined the ranks of publicly held REITs be taken over by private equity entities.
The restaurant business — and, by extension, restaurant-related real estate — is growing far more quickly than overall retail and provides more deal opportunity. Restaurants accounted for 17.4 percent of expansion activity in the retail sector this year, with only discount retailers outpacing them at 19 percent, according to research from brokerage firm Colliers International.
GE Capital's Franchise Finance group is based in Scottsdale, Ariz., and has an $11 billion asset portfolio in the United States and Canada. The acquisition of Orlando, Fla.-based Trustreet will enable the Franchise Finance group to bolster its presence on the East Coast, said the spokesman for GE Capital Solutions.
“Restaurant real estate is a business they were late to get into and the deal with Trustreet is a great way for them to expand,” says Joseph French, senior investment advisor for Sperry Van Ness.
In its current form, Trustreet owns approximately 2,015 restaurant assets in 49 states.
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