Tuesday, September 22, 2009
Just listed is a Family Dollar store in Akron, Ohio. Amazing pricing on this solid investment property. 9.0% cap rate at a $737,733 list price. Corporate leased store by a company that is doing very well in this current economy. Over 8 years left on the lease. Corporate tenant pays for taxes and insurance. The store had $1,350,000 in sales last year. $52,000 average household income in a 5 mile radius with 240,000 population in that same area. This is a wonderful investment and amazingly priced.
Now - why is it so well priced? There is a lack of 1031 exchange buyers in the market since last year. This typical single tenant net leased investment would have sold to a west coast buyer who was selling his single family rental house with $400,000 in equity. Now that same rental home has $100,000 in equity - not enough to do an exchange and with that same house rented - why sell now? The buyers went away for the low price point NNN deals - and of course that affects the chain going up to the larger shopping center investments.
This is a great opportunity for someone with cash on the sidelines or an investment property in the right location that has not lost it's equity in the last 18 months. This same Family Dollar store will sell at a 7.5 cap rate in a couple years when the market solidifies. Very good deal indeed!