Papa Johns

Tenant Description

Dollar General is one of the largest Dollar Store Chains in the US. It is a publicly traded company that started in 1939 by J.L. Turner in Kentucky. They essentially operate as mini Wal-Mart’s in smaller rural towns. Build to suit developers are very active with this tenant, and these are typically high cap rate, low price point deals. 1031 Buyer are attracted to these deals because of the strong corporate guarantee and long term lease.

Older stores tend to be NN+ leases where the landlord is responsible for roof and structure, while newer construction stores are typically built out in smaller markets, the stores built in the early 2000’s are more dense locations.

Dollar General stores average approximately 9,100 square feet of selling space and approximately 70% of the stores are located in towns of 20,000 or fewer people.

What To Look For When Buying An AT&T

If DG vacates, what can you do with the building?  Is the land in this area cheap enough that the risk is high for DG to build a new store and not renew the lease with you? What are the other retailers nearby? Are there chances of new competition coming in?   Is the area already over served or is Dollar General filling a need due to excess retail demand?

What We Like About AT&T

These deals are some of the highest cap rates you can find for a Corporate Guarantee lease. New construction stores are built with a 15 Year Lease and generally go above a 7% Cap Rate (Unless in CA, TX, or FL)

Competition

Dollar Tree is the largest competitor in the sector. They acquired Family Dollar back in July 2015 https://www.familydollar.com/corporate/news/newsjuly2015 

 

What Is Sold In An AT&T

Clothing, cleaning supplies, home decor, health & beauty aids, pet supplies, toys, seasonal items, and grocery

 

AT&T Website

https://www.att.com/

 

Corporate Office Location

208 S. Akard St.
Dallas, TX 75202

Fast Facts

Average Sale Data & Lease Structure

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