What started in 1927 as an ice house in Dallas, Texas, has turned into the world’s largest convenience store retailer – 7-Eleven®. 7-Eleven opens a store somewhere in the world approximately every 3.5 hours. Currently, there are 72,374 stores in 17 countries, of which 9,500 locations are in the United States.
7-Eleven’s rapid expansion, essential offerings, omnichannel adaptability, and low-maintenance, reliable, triple net (NNN) investment opportunities that provide a surprising number of options make 7-Eleven Westwood’s Triple Net Tenant of the Quarter for Q4, 2021.
Today’s 7-Eleven
When you say, “7-Eleven,” it’s hard to find anyone in North America who hasn’t been to one of these convenience stores or at least recognizes the brand. If you’ve ever stopped for a coffee and a snack, you may not have guessed that 7-11 was the first to provide to-go coffee cups and offer a self-serve soda fountain. 7-Eleven stores were also the first to stay open 24 hours a day and the first convenience store brand to sell gasoline.
Today, 7-Eleven, which recently acquired 3,800 Speedway stores, continues to innovate and lead the industry with needs-based products and services, home delivery, digital platforms, rewards programs, and mobile app convenience. The company is even adding 500 electric vehicle charging ports in 2022.
So, what do all these fun facts and the convenience store’s evolution mean for you, as a triple net investor? Opportunity, stability, income, and profitability.
7-Eleven is Financially Strong & Growing
On Dec. 21, 2020, 7-Eleven Inc. hit a milestone – $1 billion in annual sales of its 7-Select private branded products. Amy Werth, senior director of private brands said in an interview with Convenience Store News, “Our success has been based on a strategy that is now almost 100 years old: find new ways to do things and new things to offer that attract and excite customers.
“Today, we will be constantly adding new items that customers are looking for and improving the quality of our core items as expectations change and elevate. Our private brand products are the heart and soul of this strategy.”
Even with the pandemic in full swing in 2020, 7-Eleven US retail sales totaled $18.25 billion from 9,522 operational convenience stores, and 2020 systemwide sales were up by 3.1% over the year before, to $91.8 billion.
As of October 2021, according to Beth Owen of Franchise Times, 7-11 ranks No. 2 on the newly released Top 400, second only to McDonald’s in sales and unit growth.
Why 7-Eleven is a Top Net-Lease Investment Opportunity
Convenience store and gas station properties were once overlooked as triple net investments, but have become more popular over the past 24 months. The pandemic has accentuated the essential nature of these retailers, bolstered sales, and increased their appeal among commercial real estate investors.
Gas station stores, stand-alone, corner locations, and shopping center sites operate with modified triple net and absolute triple net leases. 7-Eleven is also offering a new non-gas, C-store concept – 1000 to 2500 sq. ft. sites that fit into small retail strip centers, retail condo space, and single-tenant locations – providing investors an opportunity to get smaller spaces in high-barrier-to-entry markets.
Benefits of 7-11 Triple Net Properties
- C-stores perform well in any economy; they are essential and recession-proof.
- Properties typically operate with 10–20 year, absolute NNNs, with 5 to 10% rent increases every five years.
- Leases are guaranteed by 7-Eleven, Inc., regardless of whether the location is a corporate- or franchise-owned store.
- The corporation has an S&P investment-grade credit rating of AA- and Moody’s Baa2.
- Properties typically have roughly 25,000 passing vehicles daily.
- Investments are bolstered by their high-quality, underlying real estate.
- Stores have one of the lowest relocation rates in the net lease industry.
- Available in many price points for all types of investors, usually between $2 and $6 million.
To Wrap it Up – 7-Eleven Wins Triple Net Tenant of the Quarter
Not resting on its laurels or assuming its well-known brand will keep profits rolling, 7-Eleven continues to innovate and serve its customers in all types of communities. With solid growth projections, integrated, needs-based products and services, and hundreds of new locations annually, 7-11 is a reliable, low- or no- maintenance net lease investment opportunity offering a dependable, worry-free monthly income. For these reasons and more, 7-Eleven wins Westwood’s Triple Net Tenant of the Quarter recognition.
No-Obligation Triple Net Investment Conversation
If you’re interested in purchasing a convenience store property or utilizing a 1031 exchange to do so, be sure to connect with a Westwood buyer’s advisor right away. It is an extremely tight market – many properties are selling before they are listed, which is why we review the marketplace daily and connect with colleagues to find our clients the most recently listed, off-market, and developing properties.
We are here to represent you and guide you in every step of the triple net buying process – from the property search to closing – all at no charge to you. Contact us today for your no-obligation, free conversation, 314-997-5227.
