Cracker Barrel Old Country Store executives are fortifying their balance sheet by teaming up with a real estate investment firm that is putting billions of dollars to work during the COVID-19 recession on retail real estate.

Lebanon-based Cracker Barrel has connected with Oak Street Real Estate Capital on two separate deals. In the first, the restaurant and retail chain assigned to Oak Street its right to buy back from a trio of entities 64 of its more than 400 locations around the country. Chicago-based Oak Street bought those stores last week for nearly $206 million and then leased them to Cracker Barrel at rents below those under the previous sale-leaseback deal.

In the second deal, Cracker Barrel has agreed to sell another 62 of its restaurants to Oak Street for nearly $150 million before also leasing those back under a long-term deal. Combined, the agreements will place about 19 percent of Cracker Barrel’s real estate in the hands of Oak Street, which earlier this year struck similar deals with Bed Bath & Beyond and Big Lots, among others. Oak Street’s principals early this year said they were aiming to raise $2.5 billion for their fifth fund.

In a filing with regulators, the Cracker Barrel team said its Oak Street deals will “bolster its cash reserves and further strengthen its balance sheet in response to the novel coronavirus pandemic and to realize other benefits.” The company expects to take home $130 million after fees and expenses as well as a lower rent bill.

Cracker Barrel CEO Sandy Cochran and her team in March drew down more than $480 million available to them under their revolving credit line and suspended the company’s dividend and buyback programs. The company finished its third fiscal quarter on May 1 with about $363 million in cash and cash equivalents on its balance sheet.

Shares of Cracker Barrel (Ticker: CBRL) were up 2.6 percent to $111.80 in midday trading Tuesday. They began 2020 around $155 and bottom out in March below $55.

This post originally appeared in our partner publication, the Nashville Post

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