New Investment Fund Focuses on C-Store Sale-Leasebacks

Early deal helped Love’s Travel Stops & Country Stores grow

OKLAHOMA CITY -- A former mayor of Oklahoma City has put together a real-estate investment fund with a healthy dip into convenience store real estate as a major venture.

Former Mayor Kirk Humphreys, a longtime developer, put together the fund from numerous separate partnerships with $50 million in assets and plans for “exponential” growth, according to a report in The Oklahoman.

The Humphreys Fund LLC, managed by The Humphreys Co., owns income-producing commercial property in Oklahoma, Texas, Kansas, Iowa, Illinois, Missouri and Georgia.

“We are actively seeking investment opportunities in retail, multifamily and hospitality properties across the U.S.,” Humphreys told the newspaper. “In light of the increased volatility of the stock market, we see a diversified investment in hard assets like real estate as a more conservative long-term investment approach.”

The initial fund combined some three dozen limited liability companies, many owning a single property, involving 85 investors and groups, some with multiple principals, said Humphreys' son Grant, a director of the fund.

He said many of the properties were QuikTrip convenience stores with triple-net leases nearing expiration--and with QuikTrip not certain it would renew leases on several of the locations.

It's a good time to grow a real-estate fund based on the sale-leaseback investment model, Kirk Humphreys said. In a sale-leaseback, a company sells its property for cash, then leases it from the new owner. This frees up money, and company attention, for operations.

Humphreys has enjoyed successful sale-leaseback agreements with QuikTrip, Braum's Ice Cream and Dairy stores and Love's Travel Stops & Country Stores.

“The Humphreys Co. has played a vital role in the success of my company,” said Tom Love, chairman and CEO of Love's. “Without the capital that was freed up through our sale-leaseback agreement, we would not have been able to reinvest those dollars into the growth and expansion of Love's nationwide.”

Now, with the economy in recovery from the recession, companies are dusting off expansion plans shelved during the slowdown and don't want to tie up capital in real estate, according to the report. Sale-leasebacks are making a comeback, and Kirk Humphreys said it will allow The Humphreys Fund to grow to $300 million in assets over the next five years.

“We see a bright future and a great need for what we offer to companies who want to expand their operations,” he said. “We're looking to fuel economic development, not just in Oklahoma, but across the United States.”