Mamo's Condo Attitude

D.C. gas station empire builder selling station for redevelopment; more to come?

WASHINGTON -- The Key Bridge gas station in Georgetown in Washington, D.C, will be demolished in 2012 to make way for new condominiums, said The Washington City Paper. The Exxon is part of Joe Mamo's gas station empire; it is some of the most valuable real estate he owns, said the report, and is another in a series of stations to be either sold or redeveloped within his own portfolio.

"The market is changing," Mamo, the CEO and chairman of Springfield, Va.-based Capitol Petroleum Group, told the newspaper in a recent rare, in-depth profile. "A lot of properties [image-nocss] are being used for best and highest use, as the properties become more expensive. So the chances are less and less gas stations in the future."

(Click here for previous CSP Daily News coverage. Andclick here for previous coverage of Mamo.)

He was able to leverage Major Oil's divestment trend. As those oil companies were getting out of the retail side of business, he considered it a "once in a lifetime" opportunity to get in, much to the consternation of Washington's independent station operators, who's growing empire made him their supplier and landlord.

But he said predictions about "peak oil," alternative fuels and electric cars might eventually make gas stations obsolete. "Long term, the real estate is where the value is," he said. "We are really a real-estate company," he said. "We're in it for the real estate."

In fact, the "long term" has already arrived for some of his properties, said the report. Mamo sold a former station property on Pennsylvania Avenue on Capitol Hill, now the site of the Butterfield House condos. He did the same with another station property. And now the Key Bridge Exxon in Georgetown, which he purchased in the 2009 deal, has been sold for redevelopment.

Mamo noted Washington, D.C., now has fewer than half the stations that it did when he leased his first station in 1987. According to his website, Mamo established DAG Petroleum Suppliers LLC in 1987.

Capitol Petroleum Group (CPG), along with its affiliated companies including DAG, is a leading distributor of petroleum products and services in the metropolitan Washington, D.C., region. CPG sold in excess of 88 million gallons of motor fuel products in 2009 and is an authorized distributor for the Exxon and Shell brands.

CPG controls a major market share of the petroleum products sold to motorists in Washington, D.C.; Arlington County, Fairfax County, as well as the City and County of Alexandria, Va.; and Prince Georges County, Md. CPG currently owns, operates or supplies 164 retail sites in this market, and in 2010, these locations generated approximately $778 million in revenues, and distributed 260 million gallons of fuel.

CPG most recently acquired Mobil stations in the three New York boroughs of Manhattan, Queens, and the Bronx, where we will own, operate or supply 71 stations.

The majority of the company's growth has occurred by completing several strategic acquisitions of major oil company retail sites. In 1996, DAG began the expansion of the company and its real-estate holdings by purchasing individual fee-simple station properties from existing independent operators or landlords and developing new-to-industry sites.

In 1998, Mamo became one of Texaco's first minority wholesale distributors in the United States and in 2000, DAG completed its first major retail acquisition of 10 sites from Motiva Enterprises LLC. In 2003, DAG converted all of its then existing stations to the Shell brand and signed a 15-year branded supply agreement with the Shell Oil Co. Since April 2009, affiliated companies of DAG successfully completed five retail acquisitions of 140 Exxon Mobil Corp. and Shell Oil branded sites located in the metro Washington, D.C., trade area and for the first time, started to market Exxon-branded motor fuel products: April 2009, 18 locations from Shell Oil under NOVA Petroleum Realty LLC. June 2009, 34 locations from ExxonMobil under Anacostia Petroleum LLC. August 2009, 23 locations from ExxonMobil under Mount Vernon Petroleum Realty LLC. September 2009, 36 locations from ExxonMobil via a sale-leaseback agreement with Getty Petroleum Realty under White Oak Petroleum LLC. February 2010, 29 locations from ExxonMobil under Springfield Petroleum Realty LLC, Burke Petroleum Realty LLC and Fairfax Petroleum Realty LLC. CPG has recently ventured outside the metro Washington, D.C., area and recently completed transactions in the New York City market: November 2010, 47 locations in the borough of Queens from ExxonMobil under East River Petroleum Realty LLC (ERPR). 24 locations in the boroughs of Manhattan and the Bronx from ExxonMobil under Liberty Petroleum Realty LLC. CPG provides its existing network of independent operators with a variety of services, including management training and support, backoffice accounting support, environmental management, station maintenance management and fuel supply and delivery. Starting in 2010, the DAG organization began to use the recently formed affiliated company, CPG, to manage all the administrative functions of its affiliated companies under a fixed-price contract arrangement.