Best Buy TENANT OVERVIEW
Updated: September 26, 2016
- Strong national brand
- Owning Best Buy can provide yield in a "yield starved environment"
- Downsizing stores nationwide
- Increasing competition from online retailers
- Recent leadership changes within company makes future less certain
Q3 Earnings Summary
- Domestic revenue increase 3.6% versus last year
- Comparable sales growth of 4.5%
- Domestic online revenue of $1.1 Billion increased 22.3% on a comparable basis
- Domestic gross profit rate was flat versus last year
Best Buy Co., Inc. (NYSE: BBY) is an American public company that is a specialty retailer of consumer electronics in the United States, accounting for 19 percent of the market.
In 2012 Best Buy implemented their “Renew Blue” strategic plan. “Renew Blue” has led to an increase in net earnings from $532 million in 2014, to $1.23 billion in 2017. These financial results caused Standard & Poor’s Rating Service to upgrade Best Buy from a BB+ rating to BBB- with a Stable Outlook going forward.
Best Buy is an attractive net leased asset because of the locations of their stores, over 70% of the population lives within 15 minutes of a Best Buy Store. These large retail stores have strong potential as another Big-Box store if Best Buy were to vacate. The large generic interior layout would translate easily into any other large retail configuration.
Headquartered in Richfield, Minnesota, Best Buy also operates in Puerto Rico, Mexico, Canada and China. The company's subsidiaries include CinemaNow, Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these companies operate more than 1,500 stores, domestically and internationally with close to 125,000 employees. In addition, the company operates over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the US.
Average Cap Rate
12 mo avg with 10+ yr lease term
Average Property & Lease
|Average Sale Price
||30,000 - 56,000
||4 - 5 Acres
||10 - 20 Years
Average Cap Rate Trend
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
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