Minnesota fans of Italian food might be interested in learning that the owner of the Olive Garden and Longhorn Steakhouse restaurant chains has announced plans to pay off $1 billion in debt. On June 23, parent company Darden Restaurants said that it would move 430 restaurants into a real estate investment trust as a strategy for paying off debt.
In addition to creating the REIT, Darden Restaurants said that it had placed 75 other properties up for individual sale and leaseback. At least 30 of the properties that were listed for sale are already under contract or sold. Darden Restaurants said that it plans to complete its real estate plans by the end of 2015 and use all of the proceeds to pay off debts.
According to the CEO of Darden Restaurants, a comprehensive review of all of the company’s options was completed before the company settled on the strategic real estate plan. The CEO said that the plan allows Darden Restaurants to take advantage of its real estate portfolio and maintain long-term shareholder value. He also announced plans for the REIT to acquire more properties and grow in its own right. Over the past 12 months, shares in Darden Restaurants have risen in value by 54 percent.
A business owner who would like to pay off company-owned debts might want to speak with an attorney about developing a strategic real estate plan. An attorney may be able to help a business owner to determine if they can leverage any commercial real estate assets that they own to raise profits.
Source: Forbes, “Olive Garden Parent Spinning Off Real Estate To Pay Down $1 Billion In Debt,” Lauren Gensler, June 23, 2015
This information is general in nature and should not be construed as tax or legal advice.