Cherie Inn

The Cherie Inn is the longest-running restaurant in Grand Rapids. Opened in 1924 in the East Hills business district at 969 Cherry Street SE, the building is itself more than a century old, with original tin ceilings, vintage Stickley furniture, and a layout that has shaped breakfast and brunch for several generations of Grand Rapids families. Michael Kulczyk has operated the restaurant for more than 27 years and is widely credited with stewarding its identity into its second century.

The sale-leaseback structure was the right tool for this situation: the operator wanted to free up capital that had been tied up in the building for decades while continuing to run the restaurant exactly as it had been run. Third Coast acquired the property at fair-market value and leased it back to the operator, so the kitchen kept opening, the staff kept showing up, and the regulars kept ordering eggs Benedict, with no change at all visible from the customer’s side of the table.

For an operating restaurant, the lease structure is where the deal gets specific. Restaurant cash flow has more seasonality and more sensitivity to local economic cycles than industrial cash flow does, and we structured the lease to reflect that, with a long primary term, renewal options, and rent levels supportable through the swings of a hospitality business. The operator gained occupancy certainty for the long run; we gained a piece of Grand Rapids history with a deeply rooted operator.

The Cherie Inn deal is also a useful example of how sale-leaseback can preserve, rather than threaten, a long-running independent operator. The structure isn’t a wind-down. It’s a tool that puts the operator’s own equity back to work in the business they spent a career building.