Dollar General
Overview
Highly visible with plenty of customer traffic, the Dollar General Corporation opportunity is appealing in terms of cheaply acquired goods, but also from a net leasing perspective. They can often be found nestled amongst retail shopping centers and strip malls, with low pricing and strong sales revenues. Considering the expanding market sector with its high capitalization rates, all newer DG locations will offer NNN standard fifteen year initial leasing terms. Additionally, investors will find ten percent price escalations offered every five years, allowing anyone in the United States to invest passively. With respect to older NN leases, landlords will usually find themselves responsible for property liability costs alongside higher capitalization. Dollar General Corp.’s latest retail building design standard is roughly 9100 sq. ft., sitting on approximately one acre, with an average of thirty separate spots for vehicle parking per location.
Lowest Cap Rate
4.00%
Lowest cap rate over past 24 months
Average Cap Rate
5.69%
12 mo avg with 5+ yr lease term
Average Property & Lease
| Average Sale Price | $1,400,000 - $2,250,000 |
| Average NOI | $90,000 - $140,000 |
| Building SF | 7,000 - 10,000 |
| Lease Term | 15 Years |
| Escalations | Flat Initial Term |
| Stock Symbol | NYSE:DG |
CREDIT RATING
Tenant Description
Founded in 1939 by J.L. Turner, Dollar General Corporation started in Kentucky. The company can be found under the stock symbol DG on the New York Stock Exchange.
With nearly 12,500 locations operating in forty three states, Dollar General continues to expand, with reports detailing 900 new retail stores as of 2016. Each building tends towards a standard retail size of 9100 sq. ft., with construction plans appropriated as build-to-suit. In many cases, standard fifteen year NNN leasing terms are offered with repeat options to renew. This also holds true for some NN leased properties, although they are typically less in term length but retain similar options to renew.
Featuring a wide selection of retail items, whether seasonal, holiday, perishable, or basic home accessories, Dollar General tends to operate with minimal expenses. Around seventy percent of their stores can be found in smaller towns and rural areas with populations less than twenty thousand.
PROS
- Highly visible, easy accessibility
- Low pricing
- NNN leasing is absolute
- Credit is investor-grade, unique amongst dollar stores
CONS
- NN leasing often creates landlord accountability for structure
- Found in smaller local markets
COMPANY QUICK STATS
| Founded | 1939 |
| Headquarters | Goodlettsville, Tennessee |
| Number of Locations | 18,216 |
| Revenue | $34.220 B |
| Company Website | https://www.dollargeneral.com |
| Key Principal | Todd Vasos |