CHICAGO—Dollar stores seem to be one of the healthier portions of a retail sector that otherwise has taken big hits due to e-commerce. Developers continue to complete new outlets for these tenants, and the increase in inventory has helped loosen up the market for investors.
Cap rates within the single tenant net lease dollar store sector increased by 10 bps to a 6.75% cap rate in the past year, according to a new report on the sector by The Boulder Group, a net lease firm in suburban Chicago. The company examined recent sales of free standing Dollar General, Dollar Tree and Family Dollar properties, the largest retailers within the sector. Cap rates for Dollar Tree assets compressed by 10 bps while Dollar General and Family Dollar, the two largest operators, experienced increases of 15 and 20 bps each, respectively.
Boulder says demand for Dollar Tree stores intensified a bit because the majority of its properties are located in primary markets or more densely-populated areas than most Dollar Generals or Family Dollars.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
