Realty Income had actually provided some assistance to Alimentation Couche-Tard when the Canadian-based firm acquired the assets from Conical Phillips back in December of last year, Realty Income's vice president of corporate communications Tere Miller tells GlobeSt.com. Now, just several months later, Alimentation Couche-Tard is entering into the sale/leaseback with Realty Income, as a way "to pay down some of the debt that they took on to finance the transaction in the first place," Miller says. Realty Income, meanwhile, will "end up with a nice portfolio of real estate at a decent lease deal to the company and a good cash flow," Miller adds.
The assets, which are Circle K-branded convenience stores, are scattered throughout nine states (41 in Florida, 38 in Arizona, eight each in South Carolina and Louisiana, seven in North Carolina, three each in Alabama and Mississippi and two each in Georgia and New Mexico). Situated on lots with an average size of one acre, the properties encompass around 2,780 sf each and have an average of 3.4 multi-pump gas dispensers per site.
Realty Income will be acquiring the properties under 15- to 17-year, triple-net leases. The purchase price of each asset equates to approximately $897,000.
After the transactions closes, Realty Income plans to place approximately $8.2 million worth of the Circle K assets into its Crest Net Lease Inc. subsidiary for future sale. The remainder of the holdings will be kept as long-term investments and are anticipated to generate around 4.84% of Realty Income's annual revenue.
The Alimentation Couche-Tard transaction is the fourth of its kind for Realty Income, according to Miller. In the fall of last year, the REIT acquired 114 convenience stores branded as Golden Gallon in a $94.5-million, sale/leaseback transaction involving the Pantry Inc. In addition, to beefing up its holdings, the transaction increased Realty Income's penetration into the Tennessee and Georgia markets, which is where the majority of the Golden Gallon properties that the company purchased are located.
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