PA Dollar General Sells for 7.35% Cap

Net Lease Press Releases

Calkain Sells Jonestown, PA Dollar General Net Lease for 7.35% Cap

Calkain Companies recently sold a Dollar General (NYSE: DG) net lease investment property located in Jonestown, PA. The transaction closed within the past 60 days and illustrated the compressing cap rates within the net lease segment of the market. The buyer was a privately, Pennsylvania-based net lease fund. The seller was a national real estate company, with a preferred development relationship with the tenant. The same seller has engaged Calkain to sell other stores throughout the mid-Atlantic states. The net lease Dollar General properties have been developed as part of Dollar General’s build-to-suit program. The stores have brand new 15 year triple net leases, which provide passive income for the new owner.

Calkain’s Andrew Fallon, Assistant Vice President, facilitated the transaction by providing exclusive representation to the seller. Investor demand for net lease Dollar General stores has significantly increased since S&P raised the company’s credit rating to investment grade BBB- in April 2012. The Jonestown store was highly sought after given its proximity and access to the I-78 corridor, the surrounding demographics, and the favorable lease structure. Fallon commented, “Cap rates for Dollar General have fallen below 7.50% and will likely trend to 7.25% based on a high demand and competitive bidding environment.” The combination of tenant credit and triple net lease terms provides a passive, bond-like fixed income investment, “The leases with Dollar General’s guaranty provide a strong income stream for the buyer, who will have limited to no management responsibilities.” The buyer financed the purchase using a regional bank.

Calkain Companies is a boutique commercial real estate brokerage firm which specializes in assisting buyers and sellers with single and multi-tenant retail, industrial, hotel and office net leased transactions. While licensed to conduct business in many states, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast, Northeast and Midwest. Additional information about the firm and listings may be found at www.calkain.com.