As reported in a Morgan Keegan/CSP Daily News Flash yesterday, the offering includes three stores in Connecticut, five in Delaware, 10 in Florida, 12 in Massachusetts, three in New Hampshire, eight in New Jersey, 14 in New York, two in Pennsylvania [image-nocss] and four in Rhode Island.
The locations are being offered through a structured sale process to be managed by Matrix Capital Markets Group Inc., Richmond, Va.
Cumberland Farms owns the real estate at all of the sites and leases them to third-party tenants under triple net lease agreements. These tenants operate independent c-stores and other retail businesses at the locations. The stores are a steady source of income for Cumberland Farms, Matrix said; however, owning the real estate at these independently operated locations no longer fits with Cumberland's plans, and the company wants to sell these assets to redeploy the capital elsewhere, it added.
Matrix said 34 of the stores currently sell motor fuels, primarily unbranded. Cumberland Farms currently supplies fuels to most of these locations, excluding the stores in Florida. For those locations where Cumberland Farms currently supplies fuels, the store operators are not required to purchase fuels from Cumberland Farms going forward and can choose their own fuels supplier after closing.
And 19 of the properties have additional retail space leased to other tenants such as restaurant franchisees, beauty care salons, etc. under triple net lease agreements. The average building size is approximately 3,100 square feet, and the average c-store size is approximately 2,200 square feet.
Matrix added that several of the stores provide excellent opportunities for buyers interested in operating the stores after closing since the remaining lease durations for the current tenants are all short term, and several leases have already expired or may be terminated if the property is sold. The average remaining tenant lease duration for the stores is approximately 2.7 years including option periods for those sites where further options exist for the current tenant.
There are currently seven stores that can be operated by the buyer by the end of 2010, and another 17 stores can be operated by the purchaser in 2011.
The stores also present excellent opportunities for real-estate investors or fuel distributors seeking to purchase the real estate and continue to collect rent from current and future tenants and potentially supply fuel to the locations, said Matrix. The stores have provided stable annual rent income averaging approximately $3,215,000 per year, and the existing tenants are motivated to renew their leases as they have a significant investment in their current businesses at the locations.
Cumberland has not pursued lease extensions with existing operators for some time because these assets are not long-term strategic assets for the company. The short lease durations provide flexibility for the new owners.
This sale process allows buyers of all types to participate as bids can be submitted for individual
stores or for multiple stores. Offers on the stores are due on October 29, 2010, but Cumberland Farms will consider accepting offers prior to the deadline.
For a complete list of the stores offered for sale,click here to visit Matrix's website.
Or contact Vance Saunders or Sean Dooley at
(804) 591-2037 / (410) 752-3833 ext. 4,vsaunders@matrixcmg.com / sdooley@matrixcmg.com
Framingham, Mass.-based Cumberland Farms is one of the nation's largest family-owned c-store chains. Operating in 11 states, in the Northeast and Florida, its mission is to make life easier for its on-the-go consumers with its trademark Farmhouse Blend coffee and Chill Zone beverages, as well as fresh food, dairy products, snacks and gasoline.
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