Circle K TENANT OVERVIEW


Net Lease Advisor Tenant Circle K

Pros

  • Investment grade corporate guaranty
  • Strong intrinsic real estate, usually located at a highly trafficked intersection
  • Fully passive NNN lease with periodic rental increases
  • Advantageous accelerated depreciation on improvements due to nature of tenant's business

Cons

  • Environmental concerns over petroleum products, although tenant fully indemnifies landlord
  • Smaller sites pose hurdles for potential redevelopment

Tenant Description

Circle K has been a successful convenience store operator for over 60 years.

Circle K is a highly sought after net lease C-store tenant. Investors are attracted to their fully passive NNN leases which are backed by an investment grade corporate guarantee from the parent company Alimentation Couche-Tard Inc. Circle K stores also feature strong intrinsic real estate as they are almost always located at highly trafficked intersections. Furthermore, because many Circle K stores feature gasoline, investors can take advantage of accelerated depreciation on building improvements.

As of February 3, 2019, Couche-Tard has 9,933 convenience store across North America operating under one of their various brands. The Couche-Tard network also consists of 2,709 stores in Europe and licensing agreements add another 2,100 stores around the globe.

The parent company of Circle K - Alimentation Couche-Tard Inc. - is the largest independent convenience store operator (regardless of petroleum integration) in terms of number of company-operated stores in North America. It has four main store brands: Couche-Tard, Kangaroo Express, Mac's and Circle K. Recently, Couche-Tard acquired Topaz, Ireland’s largest convenience and fuel retailer. Couche-Tard is making a continuous effort to rebrand all of their existing locations under the Circle K banner, except for the Couche-Tard retail brand locations in the province of Quebec due to specifics of that market.

Average Cap Rate
5.76%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $1,989,996
NOI $114,624
$/Square Foot $450 - $1,000
Building SF 2,000 - 4,500
Lot Size 0.5 - 1.0 Acres
Lease Term 10 - 15 Years
Escalations 5 - 10% Every 5 Years
Stock Symbol N/A
Credit Rating
S&P BBB
Moody's Baa2
Average Cap Rate Trend
6.52%
2018
5.47%
2019
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Palm Desert, CA 6.00%
Memphis, TN 7.00%
Cuyahoga Falls, OH 6.25%