Knoxville, TN – [December 3, 2021] – Blue West Capital has completed the sale of a single tenant net leased Valvoline Instant Oil Change property located at 816 Merchants Drive in Knoxville, TN for $1,300,000. This transaction represents the lowest cap rate year-to-date for a fee simple Valvoline property (excluding California), according to CoStar. It’s also the lowest cap rate ever recorded for a lube center property in Tennessee, according to CoStar.
Zach Wright and Brandon Wright of Blue West Capital exclusively represented the seller. The seller was a private investor based in Knoxville and the purchaser was a Texas-based 1031 exchange investor.
The Valvoline property is strategically located within a strong retail corridor just south of Interstate 75. Retailers in the surrounding area include Walgreens, CVS, Food City, McDonald’s, Advance Auto Parts, and many others. The surrounding area is densely populated with approximately 160,000 people living within five miles.
Valvoline recently signed a new 10-year lease that commenced earlier this year. The corporate lease features no landlord responsibilities and annual rental increases. Valvoline is a publicly traded company (NYSE: VVV) with a market capitalization of $6 billion.
“Single tenant properties with annual rental increases are at the forefront of demand as many investors are concerned with the current high rate of inflation. This property featured a corporate lease with no landlord responsibilities and 1.5% annual rental increases,” stated Zach Wright, Director & Partner.
“Net lease investors continue to pay premiums for well-positioned properties in income tax-free states and high growth markets. Markets such as Knoxville are very attractive to investors nationally. This is the second property we’ve sold in Knoxville in the past few months for record pricing,” added Brandon Wright, Associate.