Tim Hortons
Rochester, NY
The Opportunity
Summary
- Price: $1,741,000
- Cap Rate: 6.00%
- NOI: $104,436
- Lease Type: Fee Simple: NNN
- Building Size: 2,673 SF
- Year Built: 1997
- Parcel Size: 0.72 Acres
- Remaining Lease Term: 15 Years
- Options: Two (2), Five (5) Year Options
- Rental Increases: Greater of 1.00% or Change in CPI Annually
Forged Real Estate is pleased to exclusively offer the opportunity to acquire the fee simple interest in two, single tenant properties leased to Tim Hortons, (the “Property”) in Monroe County, located in upstate New York. The two Tim Hortons in Rochester and Henrietta are both part of the Rochester MSA that is home to over 1 million residents. Tim Hortons operates on a corporate, fee simple absolute net (NNN) lease with 15 years of term remaining. The triple-net (NNN) lease structure allows for a hands-free, passive form of ownership. Additionally, the lease features annual increases of the greater of 1% or the change in CPI.
Tim Hortons Inc., commonly referred to as Tim’s, Timmie’s or Hortons, is a Canadian multinational coffeehouse and restaurant chain based out of the Toronto area. In 2014, Tim Hortons was acquired with quick service giant, Burger King, creating Restaurant Brands International. Restaurant Brands International (RBI) is one of the world's largest quick service restaurant companies (QSR) with more than $43 billion in annual system-wide sales and 31,070 restaurants in more than 100 countries.
As of the three months ending December 31, 2023, system-wide sales for Tim Hortons grew 9.0% over the same period in the previous year reaching $1.85 billion. In Q4 2023, Restaurant Brands International’s consolidated comparable sales increased 5.8% and net restaurants grew 3.9% over the prior year. Additionally, system-wide sales increased 9.6% from Q4 of 2022 and for full year 2023, system-wide sales grew 12.2%.
Tim Hortons ended 2023 with its largest number of U.S. restaurant openings in over five years. The brand expanded into new markets including Texas and Georgia while also finalizing agreements with operators to open in other U.S. states such as Arizona, Tennessee, Missouri, Delaware, and New Jersey (QSR Magazine). A study by Placer.ai reported that between Q1 2022 and Q1 2023, weekday visits to coffee shops increased across all four major chains which included Tim Hortons, proving the coffee industry to be inflation proof. As the net lease investment industry remains highly competitive, investors have seen coffee chains as a safe bet for steady returns.
Investment Highlights:
Tenant
Tim Hortons
Ownership: SUBSIDIARY OF RESTAURANT BRANDS INTERNATIONAL
Credit Rating: BB (S&P)
Headquarters: OAKVILLE, CANADA
# of Locations: 5,800+ (As of December 31, 2023)
Tim Hortons Inc., commonly referred to as Tim’s, Timmie’s or Hortons, is a Canadian multinational coffeehouse and restaurant chain based out of the Toronto area. Tim Hortons is Canada's largest restaurant chain serving over 5 million cups of coffee every day with 80% of Canadians visiting a Tims in Canada at least once a month. The company began in 1964 in Hamilton, Ontario and has since grown to over 5,800 locations. Tim Hortons serves a variety of coffee and tea-based beverages, donuts, wraps, sandwiches, and much more. In 2014, Tim Hortons was acquired with quick service giant, Burger King, creating Restaurant Brands International. As of the three months ending December 31, 2023, system-wide sales for Tim Hortons grew 9.0% over the same period in the previous year reaching $1.85 billion.
