Net Lease Advisor Tenant Dollar General


  • Only dollar store with investment grade credit
  • Absolute NNN lease
  • Lower price point
  • High visibility and good access


  • Tertiary market locations
  • Some NN leases make landlord responsible for at least roof and structure

Earnings Highlights

Fiscal Year 2017 and Q4 Summary
  • Fourth quarter same-store sales increased 3.3%;
  • Fiscal year same-store sales increased 2.7%
  • Opened a company record 1,315 new stores, executed 2,079 total real estate projects in the fiscal year

Tenant Description

Dollar General is one of the largest dollar store chains in the US, offering deep discounts on a wide array of products.

From a net lease point of view, Dollar General is appealing given its lower price points, respectable sales record, and corporate expansion strategy in a growing market segment. Dollar General's new store model is approximately 9,100 square feet on 1.00 acre of land to accommodate a minimum of 30 parking spaces. Dollar General net lease properties have high visibility and full ingress/egress along retail corridors with good traffic. Higher cap rates and lower price points result in a larger pool of qualified buyers.

All Dollar General net leases have a corporate guarantee and typically new stores are NNN with 15-year initial terms. New Dollar General's lease terms usually include 10% bumps every five (5) years and in options making it a passive investment deal for Out-of-State investors. A significant portion of the new stores are subject to build-to-suit arrangements.. Older stores generally are NN where the landlord is responsible for roof and structure, but have higher cap rates. These older stores with NN leases can be subject to shorter terms, usually 10-year leases..

Dollar General is a publically traded company that started in 1939 by J.L. Turner in Kentucky. Dollar General offers a broad selection of merchandise, including consumables, seasonal, home products and apparel.

The stores generally feature a low-cost, no frills building with limited maintenance capital, low operating costs, and focused merchandise offering within a broad range of categories. Dollar General stores average approximately 9,100 square feet of selling space and approximately 70% of the stores are located in towns of 20,000 or fewer people.

As of 3/3/2017 Dollar General operates 13,429 stores across 44 states. Dollar General opened 900 stores in 2016, with plans to open 1,000 stores in 2017. This 1,000 store goal has been aided with the purchase of 323 Dollar Express stores.

Average Cap Rate
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $1,496,269
NOI $99,502
$/Square Foot $150 - $175
Building SF 9,000 - 10,000
Lot Size 1.0 Acres
Lease Term 10 - 15 Years
Escalations In Option Periods
Stock Symbol DG
Credit Rating
Moody's Baa2
Average Cap Rate Trend
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Toledo, OH 6.66%
Newark, IL 7.00%
Jacksonville, FL 6.35%