IHOP inks $347m sale-lease deal for Applebee's

Nation's Restaurant News, June 2, 2008

GLENDALE, CALIF. -- IHOP Corp. will sell and leaseback the properties of 187 corporate Applebee's units to garner proceeds of $347 million before taxes, the company said.

The total price reflects an average location value of $1.86 million. IHOP will use the proceeds to pay down debt, it indicated.

[ILLUSTRATION OMITTED]

The buying group includes Drawbridge Special Opportunities Fund LP and Drawbridge Real Assets Fund LP, which are affiliates of Fortress Investment Group, a New York-based asset manager.

The deal is expected to close June 16.

Upon acquiring Lenexa, Kan.-based Applebee's International Inc. last year, IHOP said it planned to seek sale-leaseback deals on Applebee's corporate real estate and to sell most of its 510 corporate units to new or existing franchisees.

The 187-unit sale-leaseback deal allows it to transfer the property leases to franchisees after a sale has been completed, IHOP said. The Glendale-based company and its franchisees operate 1,353 namesake family-dining restaurants and 1,986 Applebee's locations.