Financing

Red Robin sells 10 restaurants for $24M in sale-leaseback deal

It’s the third such deal over the past year for the chain, which will use the proceeds to pay down debt.
Red Robin has sold 28 restaurants in sale-leaseback deals since June. | Photo: Shutterstock

Red Robin sold 10 of its restaurants for $24 million and is leasing them back from the buyer, Essential Properties Realty Trust.

It’s the third such deal in a year for the 500-unit chain, which will use the proceeds to pay down debt. Red Robin sold nine stores in June for $29 million and another nine in August for $31 million. Essential Properties was the buyer in both cases. The company owns nearly 1,900 properties in 48 states.

“We are pleased to extend our partnership with EPRT, a best-in-class real estate partner to middle market companies, with the completion of a third sale-leaseback transaction,” said CFO Todd Wilson in a statement. “Over the past year, these transactions have enabled us to reduce our debt by approximately $49 million and unlock long-term value for our shareholders.”

The strategy is part of Red Robin’s turnaround plan under new CEO G.J. Hart. He announced at the beginning of 2023 that the chain would look to sell and lease back as many as 35 restaurants as it attempted to pay down debt. At the end of last year, Red Robin had outstanding borrowings of $189.1 million and liquidity of $48.6 million.

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