Tractor Supply Co. TENANT OVERVIEW


Net Lease Advisor Tenant Tractor Supply

Pros

  • Increases in base term on most leases
  • Excellent yield on a risk adjusted basis
  • Several lease extensions of five years each

Cons

  • NN leases make landlord responsible for roof and structure
  • Rural and tertiary locations

Tenant Description

Tractor Supply Co. is the largest operator of rural lifestyle retail stores in the US.

Tractor Supply is a highly sought after brand and net lease asset because its aggressive expansion and financial strength. Tractor Supply store dominate a corner of the market. They “supply the unique products to support their customers' rural lifestyle, from welders and generators to animal care products and men and women's work-wear. You can also find pet supplies, animal feed, power tools, riding mowers, lawn and garden products and more. Each store team includes welders, farmers and horse owners who collectively provide an exceptional depth of knowledge and resources.” No other Big-Box retailer can match the width of products and depth of the staff’s knowledge. Tractor Supply will remain an attractive net lease asset as they continue to thrive financial.

Tractor Supply stores are primarily located in towns outlying major metropolitan markets and in rural communities. The typical Tractor Supply store has about 15,500 square feet of selling space inside, with a similar amount of outside space. The Company leases approximately 93% of its stores, two distribution sites and its Merchandising Innovation Center(planogram) located in Nashville, Tennessee. Store leases typically have initial terms of 10 to 15 years, with two (2) to four (4) renewal periods of five (5) years each.

As of Q1 2017 Tractor Supply Co operates 1,617 retail stores in 49 states and employs more than 24,000 team members. Tractor Supply Co is headquartered in Brentwood, Tenn and its stock is traded on the NASDAQ exchange under the symbol "TSCO". In 2016 Tractor Supply was #415 on the Fortune 500.

The company was founded in 1938 as a mail order catalog business offering tractor parts to America's family farmers. Today Tractor Supply is a leading-edge retailer with annual revenues of approximately $6.8 billion.

Average Cap Rate
6.29%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $3,760,833
NOI $236,556
$/Square Foot $190
Building SF 20,000
Lot Size 2.0 - 5.0 Acres
Lease Term 15 Years
Escalations 7.5 - 10% Every 5 Years
Stock Symbol TSCO
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
6.19%
2016
6.44%
2017
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Sierra Vista, AZ 6.14%
Flagler Beach, FL 5.50%
Tahlequah, OK 7.14%