Investors eye restaurant chains for commercial real estate

New York /
Sep.September 12, 2011 11:50 AM

Lower-end nationwide restaurants such as Ruby Tuesday and Cracker Barrel Old County Store are attracting activist investors like Biglari Holdings, Carlson Capital and Becker Drapkin Management who claim the companies could make more money by selling their real estate than their food, Bloomberg News reported.

Investment firms, Bloomberg said, are angling for seats on the boards of restaurant chains with assets worth at least 53 percent more than the companies themselves. By encouraging managers to sell real estate as demand for commercial mortgage-backed bonds increases, they have a lot to gain.

Selling property “certainly is an avenue to do something to benefit shareholders,” said Josh Zamir, managing principal at Capstone Equities, a New York-based private equity firm specializing in real estate. “When a company’s stock is trading at or about or below the real estate value, it means the market is not recognizing the value of their real estate.”

Even when a restaurant is struggling, “there is residual asset value that the shareholders would have a claim on — that’s the land,” Bryan Elliott, an analyst at Florida-based Raymond James Financial, told Bloomberg. That’s why activist investors “push for property sales.” [Bloomberg]


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Northwind's Ran Eliasaf, 125 Greenwich and Bizzi & Partners’ Davide Bizzi
125 Greenwich is back in the game: Supertall condo lands financing
125 Greenwich is back in the game: Supertall condo lands financing
Vornado's Steve Roth with 1540 Broadway
Vornado writes down portfolio by $600M
Vornado writes down portfolio by $600M
Was the mortgage spike real? Applications level off
Was the mortgage spike real? Applications level off
Was the mortgage spike real? Applications level off
99 Washington Street (Google Maps, Getty)
Distressed FiDi Holiday Inn greenlit for migrant shelter
Distressed FiDi Holiday Inn greenlit for migrant shelter
Boston Properties' Owen Thomas (Boston Properties, Getty)
The commercial real estate recession is here: Boston Properties
The commercial real estate recession is here: Boston Properties
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...