You may have noticed that Westwood Net Lease Advisors represents countless clients who buy and sell and fill their real estate portfolios with Dollar General triple net (NNN) lease properties – for good reason. These reliable investments frequently offer higher cap rates than other NNNs, even in a slightly compressed marketplace, provide stable income with tax opportunities, and carry additional investor benefits that other commercial real estate (CRE) can’t match.
Moreover, increased business from a variety of shoppers who depend on the convenience, affordability, and product and services selection, and an innovative, customer-centric corporate growth formula are fueling the continued expansion of Dollar General (DG).
For these reasons and more, Dollar General has earned NNN Tenant of the Quarter commendation. Keep reading to learn more about Dollar General and why these properties make superior NNN lease investment opportunities.
“Over 40% of all new US store openings are dollar stores.” – Brad Tuttle, Money
Dollar General Financials & Store Growth Outlook
February 2022 ended Dollar General’s 2021 fiscal year. In the report dated March 17, 2022, sales were up 1.4% for the year (its 32nd straight year of growth), on top of a 21.6% increase in fiscal 2020. The company continued to roll out its produce line, DG Fresh, into thousands of stores, executed more than 2,900 real estate projects, including opening its 18,000th store, and opened 50 pOpshelf locations. DG also launched a new healthcare initiative, as well as an international expansion.
In fiscal year 2022, despite a largely unpredictable economy, pandemic uncertainty, and geopolitical conflict, Dollar General expects same-store sales growth of 2.5% and an overall 10% net sales growth. DG also plans to execute another 2980 real estate projects, including 1,110 new store openings, 1750 remodels, and 120 relocations.
John Garratt, Dollar General’s chief financial officer, explains, “We feel very good about the underlying strength of the business, as reflected in our full-year outlook for fiscal 2022. While we anticipate a challenging first quarter due to elevated cost pressures, ongoing supply chain disruptions, and the prior year sales and gross margin comparison, both of which were positively impacted by stimulus payments, we are confident in our full year plan, including our outlook for sales and EPS growth.”
The company has a multibillion-dollar market capitalization as ranked by Standard & Poors (S&P) BBB rating, and carries a Baa2 ranking from Moody’s (as of February 14, 2022).
“The dollar and variety stores market is forecast to generate a revenue of 93.9 billion U.S. dollars in 2022.” – Statista
The Benefits of Dollar General Property Ownership
As you search the Dollar General properties for sale, you’ll see similar characteristics for each. Those similarities offer the following benefits of Dollar General property ownership:
- Essential consumer staples are in always in demand which creates dependable store sales and investment reliability.
- DG has a history of stable growth in all economies since 1926: in recessions and a pandemic.
- DG properties have a low barrier to entry (typically $1–2 million sale price).
- Dollar General ownership is easy: in most cases, there is ZERO landlord responsibility.
- These NNN properties’ average initial cap rate for new locations is 4.75–5.50%.
- Dollar General’s absolute NNN leases are corporate guaranteed, which means you have the credit of a $30+ Billion company guaranteeing the lease.
- Dollar General leases include four 5-year option periods with 10% increases per period, providing the potential an additional 20 years of income.
- Dollar General NNN investments are extremely financeable with an approximate 35% down payment.
- Certain DGs are placed on prime real estate in highly visible, convenient locations near other community necessities like fast-food restaurants, pharmacies, gas stations.
- When you own more than one Dollar General, you can diversify by US state, primary, secondary, or tertiary location, store size, and lease type.
“First-time Dollar General property owners often end up investing in more Dollar General properties because it is such an easy, reliable way to earn income. Owners simply collect monthly rent while their portfolios grow, without day-to-day involvement or expenses,” said Chris Schellin, President of Westwood Net Lease Advisors.
GlobalData Retail shows 75% of the US population is now within five minutes of a Dollar General store.
Dollar General For Sale
There are countless Dollar General properties for sale across the US. You can purchase with cash, a commercial mortgage, or use a 1031 exchange. If you own a high-maintenance, costly multi-tenant property, residential rental, or underperforming properties, you can use the 1031 exchange to purchase one or more Dollar Generals for sale and defer 100% of the federal capital gains tax, possibly indefinitely.
It’s worth noting, Dollar Generals often sell immediately when listed. They are also sold off-market and direct from developers. If you’re in the market for a NNN Dollar General, the best way to locate one that suits your goals and secure a purchase contract is by working with a triple net lease advisor.
Westwood Net Lease Advisors specializes in Dollar General properties and 1031 exchanges. We represent our buyers throughout each transaction, from before the property search through closing, at no cost to the buyer. Take a look at the vast number of DG Success Stories here to get a feel for all the ways in which you can buy a Dollar General for sale.
To Wrap it Up – Dollar General is a Prime NNN Investment Opportunity
Whether you are a new or seasoned CRE investor, you’ll find NNN Dollar General properties are a stable, profitable, low-risk investment opportunity.
Dollar General triple net lease investments offer guaranteed monthly income with rent escalations for decades, low/no maintenance or landlord involvement, asset diversification, and lifestyle freedom. Overall, DG properties fulfill our best-of-the-best criteria and exceed our NNN investment benchmarks, making Dollar General our NNN Tenant of the Quarter.
If you’re interested in purchasing a Dollar General property, we encourage you to work with a reputable Westwood Net Lease Advisor who knows the national market and is well-known in the marketplace. We will help you find just what you’re looking for – all at no charge to you. Contact us today for a no-obligation conversation. 314-997-5227
