SOLD PROPERTY

Dollar General Georgia 

Year Built: 2005

Cap Rate: 7.22%

Term Remaining on Lease: ± 6.7 years

PURCHASED PROPERTY

Dollar General Michigan

Year Built: 2017

Cap Rate: 7.65%

List Price: $1,241,365

Term Remaining on Lease: ± 8.7 years

Challenge

The Matthews™ agents faced multiple challenges when presented with the opportunity to represent the seller of an NN Dollar General in Toccoa, GA. The property was built to suit Dollar General’s specific needs and had a seven-year lease term remaining, with an average annual rent of $64,200. In addition to the already challenging market in 2023, the property was in poor condition, and the landlord had several responsibilities.

The client’s goal was to reposition his equity from this older Dollar General store with landlord responsibility into an Absolute NNN Dollar General while retaining similar cash flow. This was a challenging situation to overcome due to Absolute NNN properties trading at lower cap rates when compared to NN Dollar Generals.

Strategy

The strategy was to transact in a shifting market and take advantage of the rise in cap rates. All parties were patient with marketing the Dollar General in Georgia until the agents found a buyer willing to pay an above-market price, then leveraged the supply of Absolute NNN Dollar Generals on the market to pay a below-market price on our up-leg.

The agents overcame objections when marketing the property and closed with a local buyer within 25 bps of the listed cap rate.

Results

The agents successfully sold the NN Dollar General and repositioned the client’s equity into an Absolute NNN Dollar General. The client increased their cash flow by $25,799/ Year, nearly a 9% return on the additional money placed into the up-leg. In addition to increasing the client’s cash flow, the seller was repositioned into a property with two additional years of guaranteed lease term and zero landlord responsibilities.