Thursday, June 12, 2008

Dine Equity Completes $337 Million Sale Leaseback of 181 Appleby's Restaurants

SEC Edgar Web Site - June 19, 2008

On June 13, 2008, Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s Restaurants North LLC, Applebee’s Restaurants Texas LLC, and Applebee’s Restaurants West LLC (collectively the “Tenant”) entered into a Master Land and Building Lease (the “Master Lease”) with DBAPPLEF, LLC (the “Landlord”) relating to 181 parcels of real property, each of which is improved with a restaurant operating as an Applebee’s Neighborhood Grill and Bar (the “Properties”).

The Master Lease calls for an initial term of twenty years and four five-year options to extend the term which are exercisable by the Tenant or its successors. The initial monthly base rent under the Master Lease will be $2,612,916.66. The initial monthly base rent is subject to a 2% increase on each of the following dates: January 1, 2009; July 1, 2010; July 1, 2011; July 1, 2012; and July 1, 2013. Thereafter, the monthly base rent shall increase by ten percent (10%) of the monthly base rent preceding such increase in base rent on each of July 1, 2018 and July 1, 2023. The Master Lease provides for rent adjustments during each of the option periods as well. Additionally, the tenant under the Master Lease is responsible for additional rent equal to any and all fees, expenses, taxes and other charges of every kind and nature arising in connection with or relating to the Properties.

The Tenant may sublease all or a portion of the Properties, without the Landlord’s consent, provided that certain conditions are met. In addition, the Tenant may assign its interest in the Master Lease with respect to some or all of the Properties, without Landlord’s consent, provided that certain conditions are met and the assignee agrees to enter into a direct lease with the Landlord on a pre-approved form attached to the Master Lease (“Assigned Leases”). Further, if such assignment is to a qualified franchisee meeting certain parameters set forth in the Master Lease, the Tenant shall be released by the Landlord from all obligations with respect to any Assigned Lease.

(Note: Transaction reflects an initial cap rate of approximately 9.3%.) Sphere: Related Content

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