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  Fred's Super Dollar


Average Property & Lease

Average Sale Price$500K - $2M
CAP Rate (12mo avg with 10+ lease term)8.5%
NOI$113,759
$/Square Foot$40 - $120
Building Size16,000 - 19,000 sf
Lot Size2.5 - 3 acres
Lease Term12 Years
EscalationsIn Option Periods
CREDIT RATING
N/A
S&P
N/A
Moody's
view credit rating chart
View Net Lease Property Listings at CALKAIN.COM
Net Lease Advisor Overview

Fred's Super Dollar stores offer net-lease investors an attractive choice when compared to other discount property chains such as Dollar General, Dollar Tree and Family Dollar. Newer Fred's properties are typically priced at 8.5% to 8.75% cap rates; slightly higher for older locations. Newly built retail stores are commonly constructed on 1 1/2 to 2 1/2 acre sites in small to mid-sized markets throughout southern states, improved with 16,500 SF single tenant buildings that contain on-site pharmacies, drive-up windows and in some cases outside sales areas for seasonal merchandise. Fred's leases are typically 12 year NN with flat rents; increases during options.

Pros

Cons

  • 1/3 of locations operate full-line pharmacies
  • Most stores are occupied as fee simple leases, allowing for depreciation
  • Typically feature higher cap rates
  • Most locations are NN Leases, so Landlord would be responsible for roof & structure
  • Not as well known as competitors such as Dollar General, Family Dollar, etc.
  • Regionally isolated in the southeast
Tenant Description

Fred's Super Dollar is a discount general merchandise retailer operating mainly across the southeastern states. It opened with one store in 1947 in Coldwater, Mississippi and today operates over 700 stores (including 24 franchised locations) - and is headquartered in Memphis, Tennessee. Fred's primarily competes against national, deep-discount chains Dollar General, Family Dollar, and Dollar Tree. In the past few years, it and other deep-discount retailers have taken some market share away from major discount chains like Walmart, as well. Most locations are in towns with populations of 15,000 or less.

Fred's has attempted to differentiate itself from its rivals by:

• Operating a full-line pharmacy in approximately 1/3 (294) of its stores
• Operating a seasonal lawn and garden department
• Selling tobacco products

Fred's stores stock more than 12,000 items including nationally recognized brand name products, proprietary Fred's label products, and lower-priced, off-brand products. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.


FRED'S SUPER DOLLAR TREND
CAP Rate

2013 avg: 8.6%

2014 avg: 8.5%

RECENT SALES

Foley, AL

$1,950,000 | 8.6%

Memphis, TN

$1,989,091 | 8.87%

MORE INFO
www.fredsinc.com
Google Finance: FRED
Google News: FRED