| Purchase Price | $3,250,000 |
|---|---|
| Annual Rental Income | $185,250 |
| Cap Rate | 5.70% |
| Lease Term | 20 Years |
| City | San Antonio MSA |
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Freddy’s Frozen Custard & Steakburgers Net Lease Investment – San Antonio MSA
Single-Tenant QSR Asset in One of Texas’ Most Resilient and Expanding Metros
This offering presents the opportunity to acquire a single-tenant Freddy’s Frozen Custard & Steakburgers property located within the San Antonio, Texas metropolitan statistical area (MSA). Backed by an absolute triple-net lease with zero landlord responsibilities, the asset provides passive, inflation-resistant income from one of the fastest-growing brands in the quick-service restaurant (QSR) sector. The property is located in a dynamic retail corridor, surrounded by national co-tenancy and supported by strong household growth, regional employers, and consistent consumer demand across all dayparts.
As a no-state-income-tax jurisdiction with continued business migration, rising population, and infrastructure investment, Texas remains one of the most attractive long-term markets for net lease capital. This Freddy’s asset, backed by strong site fundamentals and modern drive-thru design, offers income security, tenant strength, and location durability in a market with long-term upside.
Tenant Overview – Freddy’s Frozen Custard & Steakburgers
Freddy’s Frozen Custard & Steakburgers is a rapidly growing national fast-casual restaurant brand specializing in made-to-order steakburgers, Chicago-style hot dogs, crispy fries, and signature frozen custard desserts. Established in 2002, Freddy’s has expanded to over 500 locations across the United States, with a robust development pipeline targeting high-growth, suburban, and highway-adjacent locations.
Freddy’s blends the best of nostalgic mid-century branding with a modernized operational model focused on drive-thru performance, digital ordering, and operational efficiency. Locations are typically developed by experienced regional franchisees or corporate teams and designed with dual-lane drive-thrus, mobile order pick-up lanes, and compact dine-in footprints. This approach reduces labor requirements and increases throughput, particularly in suburban markets.
The brand is backed by private equity and is scaling rapidly through national franchising. Over the last several years, Freddy’s has invested heavily in new prototyping, site selection intelligence, and kitchen technology. Same-store sales growth and brand loyalty have remained strong, and the company is actively expanding throughout major Sun Belt markets—including targeted expansion throughout Central and South Texas.
San Antonio MSA – A Regional Economic Powerhouse with Sustained Population Growth
The San Antonio MSA is home to over 2.6 million residents and remains one of the fastest-growing major metros in the United States. Anchored by a highly diversified economy and a strategic location between Houston and Austin, San Antonio benefits from a robust mix of military, education, healthcare, manufacturing, logistics, and technology employers. Major institutions such as Joint Base San Antonio, USAA, H-E-B, Methodist Healthcare, and UT Health San Antonio anchor the metro’s employment base, creating consistent population inflows and consumer demand.
The area has experienced substantial residential growth fueled by affordability, corporate relocations, and infrastructure development. Numerous large-scale master-planned communities and mixed-use developments are expanding the metro’s suburban footprint, and these areas have become primary targets for QSR tenants, grocery-anchored centers, and service-based retailers.
Freddy’s site within the MSA is located in a corridor characterized by expanding rooftops, national retail synergy, and strong commuter visibility. With limited QSR saturation, expanding drive-thru demand, and favorable tenant operating conditions, the area supports long-term site performance and brand longevity.
Absolute NNN Lease – Zero Management and Predictable Income
The property is secured by a long-term absolute triple-net lease in which the tenant is responsible for all expenses, including property taxes, insurance, repairs, and maintenance. This lease type offers investors predictable cash flow and a fully passive ownership structure with no management responsibilities.
The lease includes scheduled rent escalations that provide inflation-hedged returns throughout the primary term and any renewal options. The tenant’s continued capital investment in modern store prototypes and site-level enhancements reflects a long-term commitment to occupancy and site performance. Whether for income-focused portfolios, trusts, or 1031 exchanges, the lease structure supports long-term investment stability with minimal risk exposure.
Strong Commercial Corridor with National Co-Tenancy and Suburban Growth
The Freddy’s property is situated along a highly trafficked arterial corridor in one of the MSA’s fastest-growing submarkets. This retail corridor is home to an established base of national brands across QSR, auto, grocery, and medical service sectors. Surrounding tenants include Walmart, H-E-B, Walgreens, Starbucks, Dollar Tree, Chick-fil-A, and national auto parts chains—all contributing to consistent daily traffic volume and high-frequency customer visitation.
The trade area features both mature residential neighborhoods and newly developed subdivisions. Retail demand is further supported by nearby schools, churches, and medical clinics, all of which contribute to consistent midweek, weekend, and evening traffic. The immediate area benefits from strong employment access and convenient connectivity to major highways and commuter routes.
Freddy’s positioning as a differentiated yet affordable QSR concept makes it an ideal fit for suburban Texas trade areas. The brand attracts family diners, professionals, and retirees alike, and its core menu offerings compete favorably across multiple dayparts.
Texas – Tax-Friendly and Business-Focused State with Institutional Investment Interest
Texas remains one of the most active and resilient real estate markets in the country. With no state income tax, low barriers to entry, and strong landlord protection laws, Texas offers net lease investors a favorable legal and economic environment. San Antonio, in particular, has become a magnet for real estate capital due to its affordability, pro-growth leadership, and long-range infrastructure investments.
Retail vacancy across suburban San Antonio remains historically low, with national tenants expanding their footprints in both infill and outer-loop submarkets. Essential-use assets such as QSRs with drive-thru capabilities continue to command institutional attention and favorable lease structures, especially those with tenants investing in long-term occupancy and format innovation.
This Freddy’s location benefits from Texas’ long-term growth trends, population retention, and pro-development outlook—making it an ideal addition to any net lease portfolio seeking yield and location security.
Demographics and Consumer Base
Freddy’s core customer base—families, value-seekers, and loyal repeat diners—is well-represented in this corridor. The location offers convenient access to essential retail and commuter routes, reinforcing long-term visitation and tenant performance.
Investment Highlights
Conclusion
This Freddy’s Frozen Custard & Steakburgers property located within the San Antonio MSA represents a rare opportunity to acquire a long-term net lease asset backed by a high-growth QSR brand in a strategic Texas market. The absolute NNN lease structure, inflation-protected income, and prime location offer investors a secure and fully passive income stream with long-term potential for appreciation.
As the QSR sector continues to evolve and demand for drive-thru service expands across suburban trade areas, Freddy’s positioning as a scalable, operationally efficient brand makes it a top performer in growth markets. With low supply of comparable product in Texas and continued migration into the state, single-tenant assets of this quality are expected to remain highly sought after for years to come.