Net lease investor evergreens his portfolio by selling one Dollar store and purchasing another in a better location.
Need help selling your dollar store in Texas? We got you covered.
“Similar to a REIT, our client has a calculated investment strategy as it relates to buying and selling net lease properties. REITs commonly evergreen their portfolios by trading and upgrading properties which also spreads out the debt-financing maturities and capital over set periods to further manage risk. In many cases, it can be an effective and methodological strategy to generate portfolio wealth creation. Our client engaged us thru our affiliated brokerage, Anthem Advisors, to exclusively sell his downleg dollar store while the upleg dollar store was going under contract during the construction phase. The market began to shift during the sales process as interest rates quickly began to rise and the majority of the marketplace began to speculate and forecast cap rate increases.”
-Marshall Baker
Deal Quick Look:
Cash buyer
Sourced internally
The Property: The subject property consists of a 9,180 SF building leased to Family Dollar and built in 2020. The NN+ lease was for an initial 10-year term with multiple extension options with over 8 years remaining.
The Challenge: The expected increase in the cost of capital for borrowers provided uncertainty on the current cap rates in the net lease market after being so low since the pandemic.
The Solution: Marshall Baker and Chris Miller, Managing Directors for Anthem Advisors/Triple Net Lending, were able to find an all-cash buyer from their internal database. Paramount to the seller was the need to relieve the uncertainty of interest rates so he could successfully lock in a long-term interest rate on his acquisition. Timing was of the essence as the 1031 upleg dollar store purchase needed to close on the first day of operations. The client is now enjoying a better located and upgraded property with long-term fixed financing coterminus with the new 10-year net lease.
