American Realty Capital Trust buys Tampa Family Dollar store

BUYER: ARC FDTPAFL0001 LLC, Jenkintown, Pa.

SELLER: Sand Dollar II LLC

PROPERTY: 8331 N. Nebraska Ave., Tampa

PRICE: $1.05 million

LAW FIRM ON DEED: Klingbeil & Roberts PA, Venice

PLANS, DESCRIPTION: American Realty Capital Trust purchased a 10,000-square-foot Family Dollar store for $1.05 million.

The price equated to $105 per square foot and a payoff ratio based on an income (capitalization rate) of 8.4%.

David Wells, managing director of the Wells Net Lease Group of Sperry Van Ness in Miami, represented the seller and Kase Abusharkh, managing director of The Kase Group in Danville, Calif., represented the buyer. Wells sold the store as part of a portfolio of nine Family Dollar stores he is marketing for the seller.

“We decided to sell them individually because prices have been going up,” Wells says. “As a portfolio we would get much less. There are more buyers coming into the market looking for investment-grade properties. Cap rates have come down about 50 basis points since April from around 9% to 8.3% or the high 7% range.”

The former owner arranged a new 10-year, double-net lease with Family Dollar on the 9-year-old building just prior to the sale. As part of the lease agreement, the tenant pays for all insurance and property taxes, but the landlord is responsible for the building structure and roof.

“Investors are looking for investment-grade properties with 10 or more years remaining on the lease,” Wells says. “They want that security as an alternative to low interest treasuries. There is a huge price difference between a 10-year lease and below. We are seeing 7.25% to 8% caps for 10-year leases and anything less than 10 years is a 9% cap and above.”

American Realty Capital Trust is one of the largest real estate investment trusts controlling more than 507 properties comprising 15.8 million rentable square feet.