7-Eleven
Overview
7-Eleven is a well-established company in the sales market for net lease investments. Most 7-Eleven stores are found in highly visible locations such as corner lots, intersections, and with provision for excellent accessibility. Considering they are already one of the world's largest franchisors and licensors of convenience stores, most 7-Eleven locations will double as gasoline retailer filling stations. 7-Eleven has been in the process of expanding the non-gasoline, C-store concept. This includes site locations that can fit into smaller lots, such as retail strip malls, single tenant locales and condo retail spaces. These retail stores can fit into parcels smaller in size, anywhere from 1000 to 2500 square foot buildings. The overall opportunity may allow investors a new chance to acquire smaller spaces in a market that typically demands high barriers to entry. Investors should further note the importance of recognizing differences between locations, whether it be a walk-up, gasoline, or non-gasoline 7-Eleven. Regardless of site type, investors can expect virtually any 7-Eleven location to receive average vehicle traffic of 25000 per day. From the net leasing investment perspective, when combining total traffic with other real estate regulations required for 7-Elevens, it is clear to see the appreciable value of these net lease properties. With respect to gasoline station sites, most 7-Elevens opt for ground leasing of corner locations, and will often outparcel shop center locations from 0.8 to 1.0 acre where ever higher traffic is present. Generally speaking, lease lengths range from ten to twenty years, with rent bumps close to 10%-15% every five years.
Lowest Cap Rate
3.45%
Lowest cap rate over past 24 months
Average Cap Rate
4.59%
12 mo avg with 5+ yr lease term
Average Property & Lease
| Average Sale Price | $3,000,000 - $3,500,000 |
| Average NOI | $150,000 - $225,000 |
| Building SF | 3,500 |
| Lease Term | 15 Years |
| Escalations | 10% Every 5 Years |
| Stock Symbol | CAPITALCOM:US500 |
CREDIT RATING
Tenant Description
As a privately and wholly-owned subsidiary of Seven-Eleven Japan Co., Ltd in Tokyo, Japan, 7-Eleven is world famous for its international chain of convenience stores with locations totaling near 7800 different franchise and company operated retailers throughout North America. From its inception in 1927, 7-Eleven has been serving the public with timeless favorites like the Slurpee®, Big Gulp®, and Super Big Bite® products alongside fresh-brewed coffee.
From city street corners to suburban communities, 7-Eleven continues to provide unparalleled customer service in addition to their large assortments of superior quality products and competitive prices. This is evidently reinforced by the various organizations supporting 7-Eleven throughout its 88 years of public operations. Most notably as the only convenience store to have joined BrandZ’s Tenth annual ‘Most Valuable Global Brands for 2015’. Not to mention that many 7-Elevens are known for their fueling stations, making them one of the biggest independent gas retailers across North America.
On average, a 7-Eleven store in the U.S. has between 2400 and 3000 sq. ft., generally offering around 2500 different products for sale. Additionally, 7-Eleven, Inc. recently announced they are going to again offer a Zero Franchise Fee initiative for businesses. This special program will waive the franchise fee for certain U.S. franchise locations that can save business owners up to $80000. This proved to be quite successful when reintroduced, allowing 100 new owners to realize their goals through the Zero Franchise Fee initiative.
PROS
- Fee simple ownership cases, accelerated depreciation available
- Corporate guarantees, excellent credit, branded recognition
- Corner locations
CONS
- Issues with filling station location environments
- Lack of depreciation with ground leasing
- Smaller parcels for C-store sites
COMPANY QUICK STATS
| Founded | 1927 |
| Headquarters | Dallas, Texas |
| Number of Locations | 78,029 |
| Revenue | $82.66 B |
| Company Website | https://www.7-eleven.com |
| Key Principal | Joseph DePinto |