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.

Net Lease Dollar General in Va Sold

Net Lease Press Releases

Calkain Companies recently sold a Dollar General (NYSE: DG) net lease investment property located in Petersburg, VA. The transaction closed within the past 30 days and illustrated the compressing cap rates within the net lease segment of the market. The buyer was a privately held, fully integrated real estate investment company. The seller was a regional real estate developer. As a preferred developer for Dollar General, the same seller has engaged Calkain to sell another store in Halifax, VA. These 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. More sales of Dollar General Stores have been transacting since S&P raised the company’s credit rating to investment grade BBB- in April 2012. The Petersburg store was highly sought after given its proximity and access to the I-95 corridor, the surrounding demographics, and the favorable lease structure. Fallon commented, “As Dollar General continues to roll out new stores in new markets, the investor demand continues to increase for superior market locations.” The combination of tenant credit and triple net lease terms provide 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 estatebrokerage 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, nationally, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast, Northeast and a new office opening in the Midwest. Additional information about the firm and listings may be found at www.calkain.com.

Net Lease CAP Rates Cooling-Off

Net Lease Press Releases 

Cap rates on Walgreens and CVS properties remained flat with the quarter prior at 6.45 percent and 6.7 percent respectively, but cap rates on restaurants fell 25 basis points to 7.25 percent. Cap rates on McDonald’s restaurants in particular fell 20 basis points to 4.8 percent, and cap rates on Dollar General stores fell 15 basis points, to 8.1 percent. 

However, few of those properties are trading in the core markets. Finding a McDonald’s or a Walgreens for sale in a primary market has “gotten tougher because there is not a lot of new things coming out of the ground and partly that’s what pushed down cap rates, as well as [the fact that] interest rates have gotten so low,” says Jonathan W. Hipp, president and CEO ofCalkain Cos., a Reston, Va.-based brokerage and consulting firm specializing in the net lease sector.

www.calkain.com

Net Leased Dollar General Sold

Net Lease Press Releases


$1.34MM Sale of Richmond, VA Dollar General Store


Calkain Companies’, a national real estate investment brokerage firm, recently sold a Dollar General (NYSE: DG) net lease investment property located in Richmond, VA. The transaction closed within the past 30 days, and illustrated the compressing cap rates within the net lease segment of the market. The seller was a regional real estate development and management company based in the Southeast. As a preferred developer for Dollar General, the same seller used Calkain to procure similar sales in Madison, VA and Ferrum, VA within the past 60 days. These Dollar General properties were recently developed as part of Dollar General’s built-to-suit program, and the stores have brand new 15-year triple net leases, which provide passive income for the new owner.

Not actual site.

Calkain’s Andrew Fallon, Associate, facilitated the transaction, providing exclusive representation to the Seller, who developed the site for Dollar General. The Richmond store was highly sought-after given its in-fill location, surrounding demographics, and the favorable lease structure. Fallon comments, “As Dollar General continues to roll out new stores in new markets, it’s rare to find a brand new in-fill location with such strong demographics in major markets.” The buyer was a Virginia-based investor seeking stable income as a passive real estate owner. Continued Fallon, “The 15-year triple net lease with Dollar General’s guaranty provided a strong income stream for the buyer, who will have limited to no management responsibilities”. The buyer financed the purchase using a regional bank.

In July 2011, S&P raised Dollar General’s credit rating to BB+, the top rung before entering investment-grade territory and Moody’s raised its rating on the company to Ba2, which is two steps below investment grade on its scale. Dollar General Corporation is the nation’s largest small-box discount retailer, with more than 9,300 stores and 2010 sales in excess of $13.04 Billion.

Calkain is a full service real estate investment brokerage firm with a national scope focusing on single and multi tenant retail, industrial, hotel and office net-leased transactions as well as asset management, tax planning, and advisory services. Calkain has offices in Reston, VA (Washington, DC), Tampa, FL, Bethesda, MD, Wilmington, DE and Boston, MA. Additional information about the firm and its listings may be found at www.calkain.com.