McDonald's represents the gold standard in net lease investing. With over 40,000 locations worldwide and a corporate guarantee on many leases, the brand offers investors predictable income with minimal landlord responsibilities.
Understanding the McDonald's Lease Structure
Most McDonald's locations operate under absolute NNN leases with 20-year initial terms and multiple 5-year renewal options. Ground leases are particularly attractive, as they often feature rent escalations tied to sales performance or CPI.
Investment Considerations
- Corporate vs. franchisee guarantee implications
- Drive-thru locations command premium pricing
- Ground lease vs. fee simple ownership structures
- Cap rate compression in prime locations