WALTHAM, Mass. --Global Partners LP has made “significant progress” in selling the nonstrategic retail sites in the Northeast and mid-Atlantic that it put on the auction block in April 2016, said Eric Slifka, president and CEO, during the company’s fourth-quarter earnings call on March 9.
The master limited partnership (MLP) retained Chicago-based NRC Realty & Capital Advisors LLC to sell the 86 properties, 28 in Connecticut, 22 in Massachusetts, 12 in New York, eight each in Maine and New Hampshire, five in Rhode Island and three in Maryland.
“Through the end of 2016, approximately 70% of those NRC-listed sites have been sold or are under agreement,” he said.
In late February 2016, Slifka said the company expected to sell 125 nonstrategic convenience stores within the next year.
“The core elements of our business, terminaling, marketing and retail, are fundamentally strong,” he said. “During 2016, we successfully positioned Global for continued growth and profitability by executing on the strategic actions we outlined on our [fourth-quarter] call a year ago. Our plan included cutting expenses and implementing an asset sale program across our portfolio concentrated on nonstrategic assets.”
It also terminated a sublease for more than 1,600 railcars, saving more than $10 million.
“Our goals were to ensure a sound balance sheet with ample liquidity and generate sufficient cash flow to cover distributions and capital expenditures without relying on outside sources of capital,” Slifka said. “To achieve these goals, our 2016 plan included cutting expenses, accelerating an asset sale program across our portfolio concentrated on nonstrategic assets and, at the same time, focusing efforts on businesses that provide the highest returns.”
He added, “Our successful execution of this plan in 2016 and continuing in 2017 has provided Global with increased flexibility to invest in assets that are fundamental to growth objectives for our retail, wholesale and commercial lines of business.”
In July 2016, in a $63.5 million deal, Global Partners also completed the sale and leaseback of 30 gas stations and c-stores, enabling it to unlock the value of the real estate.
The sale-leaseback, the Mirabito transaction and the disposition of sites in 2016 generated approximately $136 million in gross proceeds to Global Partners, it said.
“We also have added higher return assets to our retail deck where we saw the opportunity to leverage our scale and experience in view of fuel distribution and c-store merchandising,” said Slifka.
In April, it also expanded its retail network in western Massachusetts, signing a long-term lease agreement for 22 gas stations and c-stores with O’Connell Oil Associates Inc., Pittsfield, Mass.
“Looking ahead, we continue to look for opportunities to acquire additional retail and wholesale businesses and evaluate terminal assets as they become available,” Slifka said. “We executed on [our] plan. We solidified our balance sheet, improved our capital structure and increased flexibility to strategically invest in assets.”
With approximately 1,500 retail locations, primarily in the Northeast, Waltham, Mass.-based Global Partners is one of the largest regional independent owners, suppliers and operators of gas stations and c-stores.