By Adam Scherr & Tyler McGarry
The restaurant sector is shifting, with quick-service restaurants (QSRs) and drive-thru concepts outpacing full-service dining. The QSR market is projected to grow from $1.05 trillion in 2025 to $1.93 trillion by 2032. Meanwhile, the full-service restaurant sector continues to see soft sales and location closures. As a result, individual and institutional investors are focusing on national and regional brands with strong sales and recession-resistant models. Whether you’re just entering the restaurant investment space or expanding your portfolio, SIG provides the insights and strategic guidance needed for success. We leverage our relationships with tenants, mortgage brokers, landlords, and buyers to find the best opportunities. By analyzing key factors like rent coverage ratios, tenant credit, prime locations, and market conditions, we ensure long-term value for our clients.
Market Shifts and Key Trends
The restaurant sector remains a key driver in retail real estate, but investor priorities have shifted in response to changing consumer behavior and operational challenges.
As these trends continue to reshape the landscape, investors who align with shifting demand and financial fundamentals will be best positioned for long-term success.
Defining a Strong Restaurant Investment
Successful restaurant investments share common characteristics. Here’s what we prioritize when evaluating deals:
- Rent Coverage Ratio vs. EBITDAR (Inclusive of Rent) – Instead of relying only on rent-to-sales ratios, we focus on rent coverage, which gives a clearer picture of a tenant’s ability to pay rent. It’s calculated by dividing earnings (before rent and other expenses) by rent costs, showing how easily a business can cover its lease.
- Strong Tenant Credit – National and regional operators with solid financials help reduce risk and improve long-term stability.
- Prime Locations – High-visibility, high-traffic sites drive long-term asset appreciation. SIG uses traffic counts and advanced analytics to assess prime locations, comparing them to market benchmarks to predict visibility and customer flow.
- Favorable Lease Terms – NNN leases with long-term commitments and structured rent escalations provide predictable and inflation-resistant income.
- Market Trends & Demographics – A strong understanding of consumer behavior and local competition is essential for sustained success.
Finding the Best Deals
At SIG, we don’t just source properties; we provide a full-spectrum advisory approach that connects investors with high-quality opportunities and ensures their success. Here’s what you can expect when working with our team:
- Market Intelligence & Direct Access – Our relationships with key industry players, from operators and landlords to lenders and institutional buyers, give us an inside track on off-market opportunities and emerging trends.
- Tailored Investment Strategies – We align each deal with our client’s investment objectives, whether they seek long-term passive income, value-add opportunities, or portfolio diversification.
- Financial & Operational Insights – Beyond the deal itself, we provide critical analysis on tenant credit, lease structures, financing options, and market positioning to help investors make confident decisions.
- Maximized Exit Strategies – For sellers, we position assets to attract the right buyers, optimize timing, and maximize value.
Strategic Guidance for Investors
Investing in restaurant real estate requires a clear understanding of tenant health, lease structures, and market fundamentals. At SIG, we empower investors with data-driven insights, in-depth market analysis, and expert guidance at every stage. Whether you’re making your first restaurant investment or scaling your portfolio, we ensure you have the knowledge and strategy to achieve long-term success.
Ready to invest in high-performing restaurant real estate? Connect with SIG’s experts today and discover your next great opportunity.
