7-Eleven TENANT OVERVIEW


Pros

  • Strong credit and brand recognition
  • If fee simple ownership - accelerated depreciation is available
  • Corporate guarantee
  • Corner locations

Cons

  • Environmental concerns with filing station locations
  • Ground leases do not allow for depreciation
  • C-store sites generally located on small land

Tenant Description

The world's largest operator, franchisor, and licensor of convenience stores.

7-Eleven is well-established in the net lease investment sales market. Most 7-Eleven stores, often times are corner locations, which have high visibility and excellent access. Additionally, many 7-Eleven locations have filling stations.

From a net lease investment point of view, it is important to recognize the differences between walk-up, gas, and non-gas 7-Eleven locations. For all location types, 7-Eleven units typically sit on sites witnessing 25,000 passing vehicles daily. This and other real estate requirements for 7-Eleven sites significantly enhance the underlying value of these net lease properties. In regards to the typical gas station site, 7-Eleven prefers ground leases at corner locations or Shopping Center outparcel sites with 0.8 - 1.0 acre of land in high traffic areas. These leases are generally 10-20 years in length and have rent bumps of 10%-15% every five (5) years. 7-Eleven is currently in expansion mode of their non-gas C-store concept, with sites fitting into small retail strip centers, retail condo space as well as single tenant locations. This concept allows the retailer to fit on smaller parcels with 1,000 - 2,500 square foot buildings, which could allow investors an opportunity to get smaller spaces in high barrier to entry markets.

7-Eleven was founded in 1927 and has now grown and evolved into an international chain of convenience stores, operating nearly 7,800 company-owned and franchised stores in North America. 7-Eleven is privately owned and is a wholly-owned subsidiary of Seven-Eleven Japan Co., Ltd in Tokyo, Japan.

In March 2016, 7-Eleven, Inc announced that they are bringing back its successful Zero Franchise Fee initiative as an ongoing opportunity for business owners. In the program, 7-Eleven will waive the franchise fee on a select number of its US stores available for franchising, a savings of up to $80,000. Last year, the Zero Franchise Fee initiative allowed 100 people to become new 7-Eleven store-owners or multiple store-owners.

7-Eleven has been honored by numerous companies and organizations throughout its 90 years in business. 7-Eleven, Inc hit a milestone, opening its 60,000th store in 2016.

Average Cap Rate
5.02%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,986,079
NOI $149,901
$/Square Foot $850 - $1,100
Building SF 2,500 - 3,500
Lot Size Vaires (Gas/Non-Gas)
Lease Term 10 - 20 Years
Escalations 10% Every 5 Years
Stock Symbol N/A
Credit Rating
S&P AA-
Moody's Baa1
Average Cap Rate Trend
5.18%
2016
5.12%
2017
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Haltom City, TX 5.33%
Capitol Heights, MD 5.00%
Chantilly, VA 4.90%