Sought-after Kum & Go sells to Colorado-based buyer
A single-tenant net-leased property in the heart of Craig recently sold.
Buchtel Realty Investors Craig LLC, a Colorado-based private real estate family office, paid $5.09 million, or $1,500.12 per square feet, for the Kum & Go at 1302 W. Victory Way.
The 3,392-sf Kum & Go is located at a signalized intersection in the heart of the town along U.S. 40 and is surrounded by national retailers that include a Walmart Supercenter, Walgreens, McDonald’s, O’Reilly Auto Parts and City Market.
“Single-tenant net-lease investor interest has remained high throughout the pandemic,” said Zach Wright of Blue West Capital. Wright and Blue West’s Tom Ethington represented the buyer and seller, an Iowa-based private investment and development company, in the transaction.
Blue West Capital noted there was a significant amount of interest in the asset due to net-lease investor demand being especially high for convenience store properties as they can offer investors significant bonus depreciation enhancing the cash flow; convenience stores are essential business and e-commerce proof; net-lease investment properties with long-term leases remain limited; the properties offer minimal management responsibilities; and shifting demographics spurred by the pandemic have positively impacted the Colorado mountain communities.
“Investors continue to seek properties leased to high credit tenants that operate essential businesses. In fact, we have experienced cap rate compression over the past six months as investors gravitate toward the stability and attractive yields offered by STNL proper ties,” added Wright.
The property features a long-term absolute triple-net lease with zero landlord responsibilities while the lease features 7.5% rental increases every five years. Kum & Go operates more than 430 locations across the country.
“Gas stations and convenience stores (c-stores) that qualify as a ‘retail motor fuel outlet’ are eligible for significant bonus depreciation options. Depending on the investor’s needs, you can immediately write off up to 80%- plus of the asset’s value after acquisition. Deprecation options were important to the buyer as well as the centrally positioned signalized intersection and long-term credit lease,” added Ethington.
Featured in the December 16, 2020-January, 5, 2021, issue of CREJ