Alignment Realty Capital (“Alignment”), a direct, net-leased acquisitions group based in Phoenix, Arizona, is pleased to announce the closing of a sale-leaseback acquisition of four SONIC Drive-in restaurants in the St. Louis MSA.
Alignment Realty Capital acquired the four drive-in restaurants in a double-escrow transaction where a SONIC franchisee purchased the operations and real estate of a like-sized franchisee and simultaneously spun-off the real estate at closing. The additional units acquired in the transaction represent the acquiring franchisees first foray into the St. Louis MSA, and will further solidify the operator’s position as a top SONIC franchisee. The SONIC franchisor parent company was acquired by Inspire Brands (a Roark Capital Company) in 2018 for $2.3 billion.
The SONIC Drive-In locations acquired by Alignment Realty Capital were high performing stores before COVID-19, when negotiations of the transaction were initiated. During the pandemic, sales continued to increase, demonstrating the resilience of quick-service restaurants, and particularly SONIC, against the adverse economic conditions caused by the pandemic. SONIC’s drive-in business model, which naturally promotes social distancing, has recently made SONIC a top choice among quick-service restaurant customers. “SONIC is running over 30% positive year over year for the quarter,” according to Inspire Brands CEO, Paul Brown, on an interview with Yahoo Finance on August 13th.
“Having formed our company in May of this year, we are really proud to get this complex transaction done in the midst of the pandemic, showing that we can align with franchisees through difficult times to help them monetize the value in their real estate to facilitate business expansion,” noted Gary Linhart, one of the three Alignment founding partners along with Jake Gallagher and Ben Sacks.
Banker’s Trust provided Alignment Realty Capital with 5-year, floating rate, acquisition financing.
About Alignment Realty Capital
Alignment Realty Capital, based in Phoenix, Arizona, directly acquires net-leased real estate across the United States. Alignment focuses on three distinct, single-tenant property types: a) functional industrial, including cold storage, light manufacturing, and distribution b) strategic retail, including fast food and aftermarket automotive, and c) dental and orthodontic clinics. Alignment is the first company affiliated with WestHawk Capital, an incubator and accelerator of emerging real estate companies, led by Gary Linhart.
Alignment’s listen-first, problem-solving, and win-win approach aligns the interests of all stakeholders in a real estate transaction. For owner-operators, the ability to access liquidity through their real estate can be a critical component of growth for small to mid-size businesses. For traditional landlords, a strategic sale can help mitigate cash-flow and valuation risks posed by near-term lease maturities. Alignment is actively seeking new opportunities to create relationships with tenants and real estate owners throughout the country who occupy or own single-tenant properties with strong underlying real estate fundamentals.