Hanley Investment Group Arranges Sale of Single-Tenant IHOP in Tyler, Texas, to California 1031 Exchange Buyer
TYLER, Texas — Hanley Investment Group has arranged the sale of a single-tenant IHOP restaurant in East Texas to a private Southern California 1031 exchange buyer, the firm announced. The transaction is the third IHOP sale Hanley Investment Group has closed in Texas in the last five months.
Hanley Investment Group Vice President Garrett Wood, in association with ParaSell, Inc., represented the seller, a private investor based in Florida. The buyer was self-represented.
Property and Lease Details
The subject property, located at 209 S. Southwest Loop 323 in Tyler, Texas, totals 4,464 square feet on a 1.91-acre parcel. The restaurant operates as an outparcel to a Walmart Supercenter along Loop 323, one of Tyler's primary commercial corridors. The tenant, IHOP, is operated by ACG Texas, described in the announcement as one of the largest IHOP franchisees in the United States.
The lease features seven years of remaining term, 1% annual rent increases, and six five-year renewal options. The structure is an absolute triple-net lease, carrying zero landlord responsibilities. Sale price and cap rate were not disclosed.
The property's position along Loop 323 places it near major regional employers including Christus Mother Frances Hospital, UT Health East Texas, Trane Technologies, and Brookshire Grocery Company. Neighboring retailers include ALDI, Chase Properties, McDonald's, Popeyes, Subway, Take 5, Walgreens, and Dollar Tree.
"We created a competitive environment early in the process, generating multiple offers within the first two weeks of marketing," Wood said. "Our goal was to position the asset to achieve the seller's objectives, and we ultimately secured a Southern California 1031 exchange buyer. The combination of the strength of the franchisee, ACG Texas, the property's high-traffic corridor, and the benefit of an income-tax-free state helped support strong pricing."
1031 Exchange and the California-to-Texas Dynamic
The buyer profile — a Southern California investor completing a 1031 exchange into a Texas net-lease retail asset — reflects a pattern Wood noted in the transaction. Texas carries no state income tax, a factor Wood cited directly as contributing to the deal's pricing dynamics.
"This property checked the boxes that buyers continue to prioritize in today's market: a nationally recognized tenant, absolute triple-net lease structure, and a high-traffic corridor adjacent to necessity-based anchors," Wood said. "We continue to see investors gravitate toward well-located assets in growth markets like Tyler, where long-term fundamentals remain strong."
East Texas Retail and Hanley Investment Group's Regional Activity
The Tyler closing is the latest in a series of Texas retail real estate transactions for Hanley Investment Group. In late December, the firm completed the sale of an IHOP in San Marcos, Texas, to a 1031 exchange buyer from Cincinnati, Ohio — a deal the firm noted involved overcoming franchisee performance challenges and limited remaining lease term. That same month, Hanley Investment Group arranged the sale of an IHOP in Grand Prairie, Texas, representing both the buyer and seller in that transaction.
Hanley Investment Group also recently completed the sale of a vacant Wendy's in Jacksonville, Texas, which the firm said reflects continued investor interest in East Texas retail and redevelopment opportunities.
Tyler is the largest city in Northeast Texas and functions as a regional hub for healthcare, education, and retail services. The Loop 323 corridor, where the IHOP is situated, features a mix of national anchors, grocery operators, and daily-needs retailers.
IHOP System Trends and Net-Lease Restaurant Pricing
Wood offered broader commentary on conditions across the IHOP system and the net-lease restaurant sector. "Across the IHOP system, we're seeing a period of transition," he said. "Operators continue to navigate higher labor and food costs, and franchisees are increasingly focused on value-driven strategies and operational efficiency. At the same time, dual-branded IHOP + Applebee's concepts and value-menu initiatives have helped increase traffic in many markets."
"For investors looking to buy restaurant net-leased assets, the strength of the tenant and the remaining lease term remain the two most important drivers of pricing," Wood added.
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a real estate brokerage and advisory services company with a transaction track record exceeding $12.8 billion, specializing in the sale of retail properties nationwide. The firm has been active for more than 20 years. For more information, visit hanleyinvestmentgroup.com.
Sources: Hanley Investment Group