NNN Gas station property

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Tanner PileBusiness Member
Real Estate Broker · Colorado Springs, CO · Member since 2019 · 388 posts · 326 votes
3y

@Maxy Million How are you going to be financing the purchase?

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  • Michael K GallagherBusiness Member
    Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    Hey @Maxy Million what a great opportunity!  Generally the biggest cons to these are environmental impacts and restricted uses following the gas station leaving or going dark.  Generally I'd take the same approach as any investment and ensure the location was sound.  If the gas station is on a great intersection with access from both directions and lights to get in and out, and perhaps its on the outparcel of a major grocery, with car wash and or drive through potential....that to me is a 10/10 location and property.  

    Questions I'd have...how many years are left on that 20 year lease, do they have any options on the lease, and is there any underlying "ground leases" in the deal that you are absorbing somehow.  Next I'd want to understand the municipalities master plan for the area and if there are any road changes/widening or redevelopments planned that will negatively impact your traffic counts, or your access to the site.  

    I'd also check on how that gas station is doing at a larger level, is it something like a buccees or a sheets with a cult following or is this a random mobile station that sells bait and tackle and serves as the general store for the entire town...both are great options but just require different underwriting in my mind.

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  • Tanner PileBusiness Member
    Real Estate Broker · Colorado Springs, CO · Member since 2019 · 388 posts · 326 votes
    3y

    @Maxy Million How are you going to be financing the purchase?

    Tanner Pile4.931 Reviews
    WebsiteView Page
    1Reply
  • Maxy Million
    OP
    Member since 2020 · 13 posts · 3 votes
    3y
    Quote from @Michael K Gallagher:

    Hey @Maxy Million what a great opportunity!  Generally the biggest cons to these are environmental impacts and restricted uses following the gas station leaving or going dark.  Generally I'd take the same approach as any investment and ensure the location was sound.  If the gas station is on a great intersection with access from both directions and lights to get in and out, and perhaps its on the outparcel of a major grocery, with car wash and or drive through potential....that to me is a 10/10 location and property.  

    Questions I'd have...how many years are left on that 20 year lease, do they have any options on the lease, and is there any underlying "ground leases" in the deal that you are absorbing somehow.  Next I'd want to understand the municipalities master plan for the area and if there are any road changes/widening or redevelopments planned that will negatively impact your traffic counts, or your access to the site.  

    I'd also check on how that gas station is doing at a larger level, is it something like a buccees or a sheets with a cult following or is this a random mobile station that sells bait and tackle and serves as the general store for the entire town...both are great options but just require different underwriting in my mind.

     @Michael K Gallagher Thank you. Very thorough comment. Agree 100%. To answer your questions, this is a sale lease back so 20yrs from the closing. I am not sure about "ground leases" question, I will research it.

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  • Maxy Million
    OP
    Member since 2020 · 13 posts · 3 votes
    3y
    Quote from @Tanner Pile:

    @Maxy Million How are you going to be financing the purchase?

     @Tanner Pile conventional bank

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    3y

    whats the lease look like? 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Maxy Million

    Is there a phase 1 environment on the property

    That is critical

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  • Matt Barth
    Investor · Member since 2023 · 35 posts · 29 votes
    3y

    Few things to think about:

    Confirm if you get the land or not?

    Might want a Phase 1 or some sort of enviro evaluation?

    How much longer is on the lease? What is your plan after? Land value, another shop? What’s your exit plan?

    What is the credit worthiness of the tenant?

    Depending on location, political disruption in gas industry?

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  • Maxy Million
    OP
    Member since 2020 · 13 posts · 3 votes
    3y
    Quote from @Chris Seveney:

    @Maxy Million

    Is there a phase 1 environment on the property

    That is critical


     Yes. It's a year old with no significant findings.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Maxy Million

    Does it recommend a phase 2 ?

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  • Maxy Million
    OP
    Member since 2020 · 13 posts · 3 votes
    3y
    Quote from @Chris Seveney:

    @Maxy Million

    Does it recommend a phase 2 ?


     No. Based on the broker, it is a "clean" phase 1.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y
    Quote from @Maxy Million:
    Quote from @Chris Seveney:

    @Maxy Million

    Does it recommend a phase 2 ?


     No. Based on the broker, it is a "clean" phase 1.


     Wow. That is the first time ever I have seen a gas station not require a phase 2.

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