Tractor Supply is a highly sought after brand and has been aggressively expanding in recent years. While they are not currently rated they are universally regarded as strong company and a great tenant. They were previously rated B+ by S&P although they no longer have any rated debt. Their typical lease is 15 years in length with 10% bumps every five years. That lease structure combined with the ability to buy one at close to an 8% cap translates into an excellent yield on a risk adjusted basis.

Typically, Tractor Supply stores are built in rural or tertiary markets. While this is where the stores perform best; the real estate that they are built on would probably not be considered highly desirable otherwise. Additionally, the leases are typically NN, which means that the landlord will be responsible for the Roof and Structure of the building. As a practical matter this means maintaining a reserve of about $.15/sqft per year to eventually have enough money on hand to replace or repair the roof or make other repairs as the property ages.

You can read the full profile here.