As one of the largest discount retailers in the United States, Family Dollar continues to gain market share and appeal from net lease investors. Family Dollar holds investment grade credit ratings from S&P (BBB-) and Moody's (Baa3) and operates under a landlord friendly net lease structure. As a result, free-standing Family Dollar retail stores provide an attractive combination of a long-term lease, investment grade credit, and a growing market concept that continues to capture value conscious shoppers, which boosts store productivity.

With locations across 45 states, Family Dollar retail stores allow investors to evaluate property in metropolitan and rural settings. The typical Family Dollar net lease is 10 years with successive option periods when the rent increases 10% every five years during the options. The Family Dollar net lease typically requires minimal responsibilities from the landlord, limited only to roof & structural maintenance while the tenant is responsible for insurance, taxes and all other maintenance and repairs. Recently, Family Dollar has offered sale-leasebacks with 15-year NNN leases which might be an indication that the build-to-suit programs will also start producing NNN opportunities.

In 2011, Family Dollar started a multi-year initiative to re-energize the brand. The program includes physical improvements to building facades, fixtures and signage, and expanding in-store offers. These improvements will take place to existing stores, while the company also focuses on market expansion and store relocations. The result should be good for landlords and Family Dollar in the form higher tenant retention rates, higher store profitability, and long-term stability.

View full profile.