Net Lease Profile: Dollar Tree
Dollar Tree is an attractive tenant for the Net Lease Investor who prioritizes a higher cap rate. New locations typically range between 8,000-12,000 gross sq. ft. Freestanding locations are typically located in a strong retail corridor with street presence, easy ingress/egress, and ample parking. Dollar Tree also targets regional or neighborhood centers, anchored by "big box" discounters or dominant grocery stores for their stores. Though not as flashy as other prominent net lease tenants, Dollar Tree has found success focusing on its core consumer market of value minded customers.
The recession of 2009 and its lingering effects have prioritized the need for value in middle America. As a result, tenants such as Dollar Tree have found success catering to the demand for lower priced items. As such, Dollar Tree offers some protection to net lease investors concerned about potential economic downturns. Furthermore, the limited supply of net lease product overall has increased the attractiveness of this value focused tenant.
Read the Full Profile
>Higher cap rates
>Lower Price Point
>Stable, value focused store model
>NNN Leases available
>Lease terms somewhat short at 10-15 years
>Not rated by S&P or Moody's
Sign up to receive the Net Lease LEADER weekly email. Click here to subscribe!