Panera Bread
Overview
Popular with healthy minded consumers, Panera Bread is part of the fast-casual restaurant market sector, and is financially attractive when considering new prospects for net leasing. With locations situated close to shopping plazas and malls, local businesses, as well as college and educational zoning, they often provide stable low risk opportunities without landlord accountability. Leasing agreements are usually fifteen to twenty year with 1-2 options included, and may additionally provide rent escalations ranging from five to ten percent for initial term. Standard building dimensions are usually forty five hundred sq. ft., with the surrounding real estate anywhere between 1 and 1 1/2 acre lots which are often padded.
Lowest Cap Rate
3.92%
Lowest cap rate over past 24 months
Average Cap Rate
5.06%
12 mo avg with 5+ yr lease term
Average Property & Lease
| Average Sale Price | $1,500,000 - $4,000,000 |
| Average NOI | $75,000 - $175,000 |
| Building SF | 4,500 |
| Lease Term | 15 Years |
| Escalations | 10% Every 5 Years |
| Stock Symbol | CAPITALCOM:US500 |
CREDIT RATING
Tenant Description
Touted as top shareholder performer for 1-10 year returns in 2006 by WSJ Shareholder Scorecard, The Panera Bread® corporate mystique was founded in 1981. Originally known as Au Bon Pain Co., Inc., they would take Panera Bread all the way to becoming Business Week’s ‘One Hundred Hot Growth Co.’s’.
In 2015, annual revenues exceeded 2.68 billion. Prior to this when the company name change occurred, their stock values rose dramatically. So much that they pushed market caps at an estimated 4.5 billion dollars.
Panera Bread continues to expand, reportedly opening one hundred new sites in 2016. They continue testing new café ideas in novel markets and real estate locations. As a nation-wide bakery and café, they currently hold over 1970 stores, with just over 900 being corporate owned. The remaining portion are franchised by owner-operators in the U.S. and Canada, and can be found in large cities to suburbs and rural towns. They believe in creating a positively-oriented atmosphere for fast, but casual dining and superior service. Menus feature everything from fresh artisanal breads to sandwiches, soups, and salads with special dishes for the seasons.
PROS
- NNN leasing is absolute
- Initial lease terms include rent price bumps
- Choice real estate locations
CONS
- Lacking credit rating
- Franchisee-owned
COMPANY QUICK STATS
| Founded | 1987 |
| Headquarters | Sunset Hills, Missouri |
| Number of Locations | 1,902 |
| Revenue | $5.795 B |
| Company Website | https://www.panerabread.com |
| Key Principal | Niren Chaudhary |