October 18, 2017 – Hanley Investment Group Real Estate Advisors, a nationally-recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that Executive Vice President Jeremy McChesney has completed the sale of a single-tenant net-leased retail property occupied by Circle K at 5850 W. Indian School Road in Phoenix, Arizona. The purchase price was $1,300,000, which represented a cap rate of 4.62 percent, the lowest recorded closing cap for a Circle K in the U.S. in 2017, according to CoStar.
The buyer, a private investor from Phoenix, Arizona, was represented by Brice Head of RE/MAX Commercial & Investment Realty in Torrance, California. The seller, a private investor from Los Angeles, was represented by McChesney.
Built in 1987 on 0.38 acres, the 2,980-square-foot property is located at the signalized intersection of Indian School Road and 59th Avenue with 61,000 cars per day. There are 231,000 potential customers residing within three miles of the property.
“Circle K has successfully operated out of this location for over 30 years,” said McChesney. “And, recently agreed to a 10-year lease extension, speaking to the strength of this location. The absolute triple-net lease, which means little to no landlord responsibilities, offers the buyer a passive cash flow.”
According to McChesney, Hanley Investment Group procured an all-cash 1031 exchange buyer and expedited the escrow to close in two weeks.
Circle K has an investment grade S&P credit rating of BBB. Today, there are more than 3,300 Circle K stores across the USA and over 4,000 international locations.
McChesney recently completed the sale of three 7-Eleven properties in separate transactions for a combined value of $9,130,000. The properties are located in Los Angeles, San Diego and Bakersfield, California. One of the transactions had a record-low cap rate for 2017.
“We are continuing to see strong demand for single-tenant properties like Circle K and 7-Eleven, which is keeping cap rates low,” said McChesney. “Certainly, 1031 buyers have been most active in this sector and we expect that those properties with great real estate fundamentals will be most favored.”
McChesney adds that he has two more Circle K’s coming to the market in the Phoenix area this week.