MCLEAN, VA-Capital Automotive REIT has continued its campaign of acquisition, paying $39.6 million since the end of June for nine properties and improvements in various facilities belonging to its car dealership tenants.The acquisitions bring Capital Automotive’s portfolio to $989 million, and the company isn’t done yet. It expects to buy another $100 million worth of properties in 2001.

“We’re being patient. When we see good deals with good yields, we take advantage of them,” says vice president and CFO David Kay. The plan is based on buying car lots from strong dealerships and leasing them back to the sellers, while maximizing interest rate spreads on the deals.

It achieves several objectives. “We want to maintain good relations with clients and increase net asset values and shareholder value,” Kay explains.

The company expects to yield a 10.9% dividend on a running-rate basis. Analysts project that the company’s stock, now at about $13.81, will rise to $17 to $18 per share during the next 12 months.

The McLean-based REIT financed most of the debt short-term but expects to convert this to permanent financing during the fourth quarter. About $1.9 million was paid in operating partnership units and $1.6 million in permanent financing was arranged up-front.

Most of the acquisitions, made in four separate deals, build upon Capital Automotive’s existing relationships with dealer groups. These include buying five properties in Alabama, Florida, North Carolina and Texas from Sonic Automotive, the nation’s second largest auto dealer group; one Illinois property from Auffenberg Automotive Group; and two Houston properties from Momentum Automotive Group. Capital Automotive also found a new partner, buying a wholesale vehicle auction property from Auction Broadcasting Co. in Indianapolis.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.