Hanley Investment Group Completes Three 7-Eleven Deals for $4.2 Million
Hanley Investment Group Real Estate Advisors, a nationally-recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that Executive Vice President Jeremy McChesney has completed the sale of three 7-Eleven properties in separate transactions for a combined value of $4,227,000. The properties are located in Valley Park, Missouri; Bradenton, Florida; and Lakewood, Ohio. McChesney has now completed the sale of 26 7-Eleven properties in over 2.5 years, the most 7-Elevens sold by one individual in the U.S. during this same period.
“These sales highlight the continued demand for single-tenant net-lease corporate-guaranteed 7-Eleven properties and investors’ willingness to look outside of major metros to find them,” said McChesney. 7 Eleven, Inc. is the world’s largest chain in the convenience-retailing industry. Based in Irving, Texas, 7 Eleven® operates, franchises and/or licenses more than 63,000 stores in 18 countries, including 10,900 in North America.
According to McChesney, S&P Global Rating gives 7-Eleven Inc. an investment-quality crediting rating of “AA-.”
“All three 7-Eleven properties that transacted had good fundamentals including absolute triple-net leases and high-profile locations with good traffic counts, demographics, proximity and ease of access to major thoroughfares plus they were backed by 7-Eleven corporate,” said, McChesney.
In Valley Park, Missouri, McChesney arranged the sale of a single-tenant retail property occupied by 7-Eleven with a gas station at 13515 Big Bend Road with eight years remaining on the primary term of the corporate-guaranteed, absolute triple-net lease with three five-year options and 10 percent increases. Built in 1998, the 2,193-square-foot building and gas station sits on 0.59 acres. The purchase price was $1,967,000. The buyer was a private investor from Dublin, California, represented by Matt Lemon and Suheil Sahouria of The Trafton Group of San Mateo, California. McChesney represented the seller, Equitas Investments of Hermosa Beach, California.
According to McChesney, Hanley Investment Group generated seven offers and closed at 95 percent of the listed price. “We leveraged the Hanley Investment Group platform to find a California buyer willing to pay the highest price for this well-located property,” noted McChesney. “This property sits at the hard corner, signalized intersection of Big Bend Road and Dougherty Ferry Road with daily traffic counts exceeding 35,000 at the intersection and benefits from a dense, affluent demographics. There are more than 160,700 people with an average household income of $115,561 within a five-mile radius of the property.”
In Bradenton, Florida, McChesney completed the sale of a single-tenant corporate guaranteed 7-Eleven store and gas station with 10 years remaining on the primary lease term. The 2,787-square-foot building, which was built in 1979 on 1.40 acres and remodeled in 2008, is located at 2011 44th Avenue West and 26th Street in Manatee County. The purchase price was $1,375,000, representing 99 percent of the asking price and 5.28 percent cap rate. McChesney represented the 1031 exchange buyer, a private investor from Palm Desert, California, and the seller, Equitas Investments of Hermosa Beach, California.
“We sourced the buyer during the first week of formally marketing the property, and generated a total of eleven offers,” said McChesney. “The investors were attracted to the property’s strong fundamentals including the fact that this 7-Eleven had 10 years remaining on the primary term of the absolute triple-net lease with three five-year renewal options with 10 percent increases, and was well-positioned along 44th Avenue with over 51,000 cars per day. Furthermore, the five-mile trade area has experienced explosive growth of 8.15 percent from 2010 to 2016, which was very appealing.”
In Lakewood, Ohio, McChesney arranged the sale of a single-tenant 7-Eleven store with seven years remaining on the primary term of the absolute triple-net lease. The corporate-guaranteed lease included two five-year options with 10 percent rental increases. The 2,410-square-foot building, which was built in 1975 on .29 acres, is located at 16165 Hilliard Road at the signalized intersection of Olive Avenue and Hilliard Road in Cuyahoga County. Over 130,170 people with average household incomes of $64,625 per year reside within a three-mile radius of the property. The purchase price was $885,000. The buyer, a private investor from Encino, California, was represented by Matt Waterman of Pegasus Investments, also from Encino. McChesney represented the seller, Equitas Investments of Hermosa Beach, California.
“7-Eleven has operated out of this location for over 33 years and recently elected to extend their lease prior to the lease expiration, which speaks to the success of the store and the strength of the location,” said McChesney. “We generated a total of four offers.”
From December 2016 through December 2017, 84 7-Elevens traded across the country with an average cap rate of 5.61 percent. What is interesting to note is that nearly half of these buyers were from California. The average sale price for a 7-Eleven during this period was $2,165,000 and ranged as high as $5,980,000 and as low as $305,000. As of January 1, 2018, there were 70 7-Elevens listed for sale.
“We expect that sales volume for single-tenant 7-Eleven net-leased investments to stay strong in 2018. Existing properties with an extensive history and newly-minted long-term leases should continue to be in the highest demand and trade in the high four-percent to six-percent cap rate range. Properties with a shorter lease term located in areas with strong real estate fundamentals will also remain in high demand. Investors like single-tenant 7-Eleven properties for their residual value since they are typically located in high-traffic corridors and fundamentally-rich locations,” said McChesney.
“With an AA- credit rating, zero land responsibilities and a lack of quality alternative investments, single-tenant 7-Eleven stores will continue to be one of the most highly sought-after retail investments in today’s market,” McChesney added.
McChesney currently has multiple 7-Eleven properties available for sale including single-tenant 7-Elevens in New Jersey, Colorado, Missouri, and California.