The PMG station
LINTHICUM HEIGHTS, MD–Petroleum Marketing Group, a net-leased fueling station and convenience store here just traded for $6.2 million, or a 6.32% cap rate. The seller was a developer and former operator who has owned the property since 2004 and the buyer is a private investor who plans to hold the property on a long-term basis.
Christopher Burnham and Dean Zang of Marcus & Millichap marketed the property on behalf of the seller and secured the buyer. The property received 10 offers and closed at 96% of its original list price.
Gas stations are becoming a preferred asset class for net lease investors in large part because they are “Amazon resistant,” Zang tells GlobeSt.com.
Traditionally, drug stores and banks have been the most popular retailer to take space at corner locations, he said. In the last two years they have scaled back their expansion activities, leaving something of a void in the market. Gas stations moved in and in the process became some of the highest paying renters for corner locations, Zang says.
Net lease investors have taken note of this trend as well as come to the obvious conclusion that gas is one of the few consumer staples that Amazon cannot sell online. Hence cap rates are compressing, Zang says. “We are seeing some gas stations trade in the mid-4% range. In Manassas, VA, we just sold a gas station at a 4.8% cap.”
For these reasons, the Marcus & Millichap team has traded 12 different net-leased gas stations, more than any other category of retailer this year, according to Burnham.
The PMG station that it just sold is located at 500 Progress Dr. on a 1.65 acre corner lot at the entrance to BWI Technological Park. This was another plus to the buyer, Burnham says. “Investors are seeing the potential in the BWI area for strong growth in the years to come. Proximity of employers like Northrop Grumman, Ciena Corp. and Fort Meade drives employment and traffic in the area.”
Hear from the net lease sector's top leaders as they explore current and emerging trends and provide their outlook for continued success in this space. Join us at RealShare Net Lease West on Nov. 1 and 2, where you'll meet the top owners, investors, brokers and financiers in the net lease and sale-leaseback community. Learn more.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
