Sale of Three 7-Elevens Achieves ‘Record-Breaking’ Cap Rate

Hanley Investment Group completes deals in California, Florida

7-Eleven Orlando

CORONA DEL MAR, Calif. -- Hanley Investment Group Real Estate Advisors has completed the sale of three 7-Eleven convenience stores, two in Los Angeles County and the other in Orlando, Fla., for a total of $10.56 million.

One of the transactions had a record-breaking capitalization rate, the Corona Del Mar, Calif.-based retail real-estate brokerage and advisory firm said.

“These sales highlight the strong appetite investors have for high-quality, investment-grade net-lease properties and investors continued willingness to look in major metros across the country to find them,” senior vice president Jeremy McChesney said.

He has sold 15 7-Elevens in the past 16 months, the most 7-Elevens sold by one individual in the United States during this period, said the firm.

“All three properties had attractive fundamentals including high-profile, high-traffic, signalized locations, great proximity, ease of access to major thoroughfares, and good demographics,” said McChesney. “They also have corporate-backed leases.”

In Los Angeles County, McChesney completed the sale of a single-tenant corporate-guaranteed 7-Eleven ground lease with more than 11 years remaining on the primary term of the lease in Culver City, Calif. (pictured). Built in 2012, the 1,481-square-foot 7-Eleven building is situated on a 0.28-acre corner parcel. The purchase price was $2.7 million, representing $1,823 per square foot and a “record-breaking” cap rate of 3.56%, the lowest cap rate nationwide for a 7-Eleven property that closed in 2016, the firm said, citing CoStar. McChesney represented both the buyer, a private investor based in Newport Beach, Calif., and the seller, a private investor based in Yorba Linda, Calif.

“This is a great, dense, affluent, infill location in Culver City with 45,000 cars per day along Sepulveda Boulevard,” said McChesney. “We negotiated a short 35-day escrow and found the seller’s replacement property while in escrow and closed on the new property two days later, thus preserving his income stream.”

Also in Los Angeles County, McChesney negotiated the sale of a 7-Eleven strip center in Lakewood, Calif. Built in 1983, the 4,960-square-foot, two-tenant building sits on 0.46 acres on a corner with 54,000 cars per day. The purchase price was $3.36 million, representing a cap rate of 4.25% and $677 per square foot. McChesney represented the buyer, a private investor from Yorba Linda. The seller, private investors in Orange, Calif., was represented by Dave Hunsaker and Chuck Noble of Lee & Associates of Orange, Calif.

This is the second time in recent years that Hanley Investment Group has been involved in the sale of this 7-Eleven property.

In Orange County, Fla., McChesney completed the sale of a single-tenant 7-Eleven gas station with six years remaining on the primary term of the lease in Orlando. Built in 1998, the 2,950-square-foot 7-Eleven building is situated on 1.16 acres on a corner with 53,000 cars per day. The purchase price was $4.5 million, representing a cap rate of 5.56% and $1,525 per square foot. McChesney represented the seller, a private investor based in Hermosa, Calif. The buyer, a local private investor, was represented by Rich Vaaler of Vaaler Commercial Real Estate in Leesburg, Va.

“This was an aggressive closing cap rate for a single-tenant 7-Eleven with a short-term lease at a very high price point,” said McChesney. “We negotiated a short 30-day escrow with the all-cash investor to meet the seller’s exchange requirements.”

Based in Irving, Texas, 7-Eleven Inc. operates, franchises and licenses more than 10,700 7-Eleven convenience stores in North America.