Albany, New York- The topic for the day for Net Lease Properties site is on Sale-Leasebacks of NNN Lease Properties. Getty Realty Corporation has acquired 59 convenience stores in and around the northern suburbs of New York City. Getty Realty Corp. is the largest publicly traded real estate investment trust (REIT) that specializes in the ownership and the net leasing of service stations, convenience stores and petroleum distribution terminals in the Country. Some Net Leased Properties investors are constantly searching for a quality REIT. The Net Leased Properties investors seek a low debt to equity ratio for the possible REITs and rising dividends make the REIT attractive.
Getty Realty Corp. also provides financing to the petroleum and convenience store industries for acquisitions, and site upgrades. They are currently refinancing through sale-leaseback and net lease financing programs. Getty Realty Corporation currently owns or leases approximately 1,109 service stations and convenience store properties. These net lease properties and petroleum distribution terminals are spread out in twenty-one states. Getty Realty Corp. provides innovative commercial financing solutions that can be customized to meet the needs of Investors. NNN Commercial Real Estate analysts see the Getty Realty Corp. REIT as the right decision with its combination of high dividends, and high potential profitability.
The Sale Leaseback transactions, with net leased properties, were also in Westchester, Rockland counties and the lower Hudson Valley. Getty Realty Corp. is a locally headquartered commercial real estate investment trust (REIT) and took ownership of the Mobil-branded properties. The sale-leaseback price for all the nnn lease investments was for $111.3 million. A sale-leaseback is a very convenient process for commercial property owners to secure a quick cash infusion for their business to move forward.
The 59 nnn properties were acquired in a simultaneous sale-leaseback transaction with Exxon-Mobil, CPD NY Energy Corp. (a subsidiary of Chestnut Petroleum Distributors) and Getty Realty Corporation. The results are that CPD acquired a portfolio of 65 gasoline station and convenience stores from Exxon Mobil and simultaneously completed a sale-leaseback of most of the NNN Lease Properties with Getty Realty Corporation.
We also have information on the Investment Property financing portion of this sale-leaseback deal with gas stations and convenience stores. The majority of the net lease properties financing was provided by Getty with a sale-leaseback transaction with a long term triple net lease. This Triple Net Lease contains an initial term of 15 years plus renewal options are available for the Tenants. The remainder of the net lease funding was provided by Getty to CPD NY Energy Corp. under a secured, self-amortizing commercial loan. This new Commercial Mortgage will have a 10-year loan term.
The NNN Lease Properties acquired by Getty, with the sale-leaseback are high volume locations, with strong net operating histories. The NNN Lease Properties will continue to sell gas under the Mobil brand and will be operated by CPD NY Energy Corp. or by the existing independent dealers who will also be supplied fuel by CPD. These sale-leaseback NNN properties are located in strong markets with outstanding long term demographics that help fuel triple net lease properties.
Getty Realty Corp has a history of these sale-leaseback transaction that we saw in 2009. White Oak Petroleum L.L.C. sold 36 Exxon gasoline station and convenience store NNN properties for $49 million in 2009. This was a sale-leaseback transaction with Getty Realty Corp. acquiring the NNN commercial real estate. White Oak Petroleum L.L.C. was a Springfield, Virginia based company.
Commercial Real Estate Acquisition Criteria
Below we have some points to consider when evaluating whether to purchase a NNN Lease Property or to acquire other types of Commercial Real Estate.
• geographic location and current property type;
• condition, zoning and use of the property;
• historical performance and current and projected cash flow;
• potential for capital appreciation on value-added property;
• potential for economic growth in the area where the property is located;
• presence of existing competition and potential future competition;
• prospects for liquidity through sale, financing or refinancing of the property;
• possible 1031 Exchange and tax considerations.
