REIT Sites

American Realty Capital Trust acquires 13 Kum & Go properties for $23 million

Greg Lindenberg, Editor, CSP

JENKINTOWN, Pa. -- American Realty Capital Trust Inc., a real-estate investment trust (REIT), said yesterday that it acquired 13 fee-simple properties of which Kum & Go LC is the tenant on September 16, 2010, and an additional property on September 20, for an aggregate purchase price of approximately $23 million, according to a U.S. Securities & Exchange Commission (SEC) filing.

"Most of our store locations go through sale-and-leaseback transactions," Niki DePhillips, Kum & Go vice president of real estate, told CSP Daily News. "For example, we sell [image-nocss] the location to an investor and then lease it back under a long-term agreement. This type of transaction is common with commercial real-estate properties."

She added, "American Realty Capital Trust Inc.'s decision to purchase the 14 properties in Missouri was purely an investment decision. Kum & Go was not involved in the transaction nor will the transaction affect our continued operation of those stores."

The properties are located in Springfield (8), Hollister, Bolivar, Waynesville, Fair Grove and Monett, Mo. The properties contain 67,310 square feet of gross leasable area.

The original lease terms at commencement ranged from five to 19 years with an average of 13.4 years currently remaining, according to the filing. The leases contain contractual rental escalations of 8% every five years and provide four renewal options for five years each. The leases are triple net; Kum & Go is required to pay substantially all operating expenses, including all costs to maintain and repair the roof and structure of the building, and the cost of all capital expenditures, in addition to base rent.

The average annual base rent for the initial term is approximately $2.1 million.

American Realty Capital Trust said that it funded the acquisition of the property with proceeds from the sale of its common stock. It added that it may finance the acquisition post-closing; however, there is no guarantee that it will be able to obtain financing on terms that it believes would be favorable, or at all.

Jenkintown, Pa.-based American Realty Capital Trust is a nontraded, publicly registered REIT that acquires freestanding, single-tenant properties, net leased long-term to investment-grade and other creditworthy tenants.

Kum & Go is a privately-owned convenience store and gas station chain located in the Midwestern United States. The company was founded in 1959 and is headquartered in West Des Moines, Iowa. It operates stores in Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Colorado, Arkansas, Wyoming and Wisconsin.