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Updated: Road Kill – Logan’s Roadhouse Files for Bankruptcy; Closing 21 Eateries

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Declining Customer Traffic at Casual Steakhouses Forces Ch. 11 Restructuring

Logan’s Roadhouse Inc., a Nashville-based casual dining chain with 234 restaurants, is the latest retailer heading into Chapter 11 bankruptcy reorganization.

Roadhouse Holding Inc., the ultimate parent company of the chain, is 97% owned by affiliates of Kelso & Co., a New York-based private equity firm.

As part of the bankruptcy reorganization, the owners have asked the court to reject leases on 21 of its restaurants, about 10% of its eateries.

[Editor’s Note: This story was updated at 8:45 am Monday Aug. 15 with restaurant closure information.]

It is seeking to cancel leases on the following restaurants.

Address, City, State, Landlord

  • 2649 S. Market Street, Gilbert, AZ, Hamilton Chase – Gilbert LLC
  • 11674 University Dr, Orlando, FL, John M. Rife
  • 7480 W. Colonial Drive, Orlando, FL, Rainbow Ventures LLC
  • 1230 N Westover Blvd., Albany, GA, Sherwood Properties LLC
  • 101 Capital Square Drive, Brunswick, GA, Jeannette S. Abdelmalak
  • 11301 Abercorn Street, Savannah, GA, Genevieve Bratschie
  • 51 Lincoln Hwy, Fairview Heights, IL, CBL & Associates
  • 4825 E. 82Nd St, Indianapolis, IN, U-Gas Investments
  • 10780 Parallel Pkwy, Kansas City, KS, CLNM Holdings LLC
  • 7940 W 135th St, Overland Park, KS, National Retail Properties
  • 3050 Riffel Dr., Salina, KS, Bernard Leviton
  • 2945 Wimsatt Ct, Owensboro, KY, Logan’s Lot LLC
  • 6571 Blue Bonnet Blvd., Baton Rouge, LA, GGP – Mall of Louisiana
  • 3323 Ambassador Caffery Pkwy, Lafayette, LA, Lafayette Parish School Board
  • 14235 Hall Road, Shelby Township, MI, Himaloy LLC
  • 7110 Sawmill Rd, Columbus, OH, PTCK LLC
  • 2310 Wilkes-Barre Township M, Wilkes- Barre, PA, Brixmor GA Wilkes-Barre LLP
  • 2200 S. Hwy 6, Houston, TX, Cole Properties
  • 21119 US-281, San Antonio, TX, IA Management LLC
  • 12821 Fair Lakes Pkwy, Fairfax, VA, Well Made LLC
  • 46321 McClellan Way, Sterling, VA, Bow G. Jung and Ying-Fung Jung

    In the last three years, the chain had been using sale/leaseback arrangements as a financing mechanism to offset slower sales. As of last November, it had sold 11 restaurants and had its last eight owned properties under contract. It generally signed deals to lease the properties back for 20 years.

    Net leased investment REITs have been active buyers of their restaurants in recent years, which have sold at an average price per square foot of $437, according to data from CoStar COMPs.

    Prior to this week’s filing, Logan’s Roadhouse hired Hilco Real Estate LLC to review its real estate portfolio heading into the restructuring. Hilco is coming up with plan for restructuring, assigning/selling, or rejecting the leases for underperforming locations.

    Last year, the Logan Roadhouse chain posted net revenues of over $606.4 million but an unaudited EBITDA loss of $112 million. As of this week, the chain had outstanding debt of about $416 million.

    The casual dining sector as a whole has continued to suffer, with traffic declines of approximately 3% over the past year as consumer preferences shift towards cheaper, faster alternatives, Keith Maib, senior managing director of Mackinac Partners, who has been appointed chief restructuring officer, stated in court filings. In the first half of 2016, the chain experienced an 8.77% drop in customer traffic and a 3.95% decrease in restaurant sales.

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