Red Robin has sold nine restaurants for $29 million to a real estate investor and will lease them back from the buyer.
The 500-unit chain will use the proceeds from the sale-leaseback deal to repay debt, fund capital projects and buy back stock.
The strategy is part of Red Robin’s turnaround plan under new CEO G.J. Hart. He announced at the beginning of the year that the chain would look to sell and lease back as many as 35 restaurants. It is continuing to look for buyers for other locations.
The buyer of the nine stores is Essential Properties Realty Trust, the owner of nearly 1,700 properties.
“We are pleased to have partnered with EPRT, a best-in-class real estate partner to middle market companies, on this initial tranche of properties,” Red Robin CFO Todd Wilson said in a statement. “We look forward to a long-standing and mutually beneficial relationship with them.”
As of April 16, Red Robin had total long-term debt of $203.1 million. Capital expenditures in the quarter were $16.1 million. It has been in the process of installing new flattop grills in all of its restaurants in an effort to improve its burgers.
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