Net Lease Tenant Profile: Kohl's
From a net lease standpoint, Kohl’s offers a credit tenant backed guarantee with long term leases (often ground leases) and rent increases. Although Kohl’s is a department store – in the same category as J.C. Penny – most of their locations are free-standing. Currently, Kohl’s operates stores in every U.S. State but Hawaii.
As a retailer, Kohl’s claims to offer “Off-mall” convenience and a combination of specialty and national brands for their customers. Kohl’s also is active in remodeling their stores and states that 50% of their stores are either new or remodeled in the past 5 years. As of 2013, Kohl’s leases approximately 65% of their stores while owning 35%. As of February 2013, Kohl’s was rated as America’s second favorite retail chain by Market Force Information and #1 in “Customer Loyalty Engagement Index” by Brand Keys.
- Lease usually includes increases
- Investment grade credit tenant
- Corporate Guarantees
- Long term leases
- High price point
- Due to size, harder to lease property if the tenant leaves
- Current trends point away from large scale retail stores
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