Chili’s Grill & Bar

Location Chicago, IL
Lease Term 11 Years
Acquisition Date Dec 2016

Chili’s Grill and Bar is an infill pad outparcel located ½ mile from O’Hare Airport and 1/8 mile from All State Arena in the dense Rosemont submarket, which borders the  city of Chicago. The Property is adjacent to Target and enjoys 78,000 unimpeded views per day (corner visibility). Within a 5-mile radius, the population is greater than  312,000. The store sales are strongest in ERJ Dining’s system, $4.1 million vs. average of $2.3 million in the Chicago area. There is a strong demand for outparcel locations  given dearth of available opportunities.

No. You are investing in NADG NNN REIT I that has purchased this building, which is leased to the tenant Chili’s Grill & Bar.

That is correct. You as an investor own a share of the Fund that owns this building.

A triple net lease (triple–Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three “nets”) on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.)

  • The tenant is able to effectively control their real estate
  • The landlord’s investment is passive, and the tenant absorbs increases in operating expenses (real estate taxes, capital repairs, etc.)
  • The tenants are normally willing to sign longer term leases (10-20 years)

A building lot separated or separable from a commercial development, the selling of which provides liquidity for the developer.

Yes you can as freestanding building are separately platted parcels. This is extremely advantageous to both the tenants and owners.

  • High demand from tenants.  This demand remains strong as newer types of retailers have emerged and compete for the prime visibility and easy access (Urgent Care Centers and ER Centers, Dental Care, Wireless Carrier Stores).
  • Tenants desire the visibility as well as the control over their real estate.  The building and signage reflects the retailers brand and image.  Whereas in a shopping center a retailer would only get to put up a sign on the building, in a freestanding building the entire building is designed by the retailer.  High visibility builds brands.

Why is the renewal rate on leases so high in the NNN retail asset class?

  • Majority of NNN retailers are national or regional tenants that have meticulous site selection criteria models (they know where they want to be which is why they sign the longer term leases and invest in their properties the way they do)
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