DENVER, CO – [August 15, 2022] – Blue West Capital has completed the sale of a single tenant net leased gas station portfolio for $44,126,698. Zach Wright, of Blue West Capital, represented the seller and purchaser in the off-market transaction. The portfolio was comprised of five Kum & Go properties and one Circle K property. The portfolio consisted of the below locations:
- Kum & Go – 1134 31st Street, Des Moines, IA – $9,513,417
- Kum & Go – 16351 Green Valley Ranch Blvd, Denver, CO – $8,675,758
- Kum & Go – 4451 North Thompson Street, Springdale, AR – $8,526,176
- Kum & Go – 2801 East 13th Street, Ames, IA – $7,439,213
- Circle K – 10200 North Rodney Parham Road, Little Rock, AR – $5,285,230
- Kum & Go – 801 North 9th Street, Sapulpa, OK – $4,686,904
All six properties feature long-term triple net leases with no landlord responsibilities. The weighted average lease term of the portfolio was 17.5 years at the time of sale. All leases feature rental increases every five years. The Kum & Go properties are all corporately operated and guaranteed. Kum & Go is one of the largest convenience store chains in the U.S. with over 400 locations. The Circle K property is operated and guaranteed by Gas Express, a franchisee with approximately 135 locations.
All six properties qualify for 100% bonus depreciation. This allows an investor to immediately write off the value of all improvements in year one, which can be as high as 100% of the acquisition cost (net of land). This 100% bonus depreciation is scheduled to gradually phase out after 2022. The bonus depreciation will be reduced by increments of 20% per year until it’s completely phased out in 2027.
The seller was a New York-based partnership of high-net-worth real estate investors & professionals. The purchaser was Southeast-based real estate investment company in a 1031 exchange.
“With 2022 being the final year of 100% bonus depreciation, we’re seeing significant demand for single tenant gas station properties. There is a limited supply of high-quality and qualifying properties currently on the market. We expect the demand for these assets to intensify throughout the rest of this year,” stated Zach Wright, Director & Partner.