May 16, 2023

Dollar Stores & Inflation

How Rising Costs Impact the Dollar Store Industry

The dollar store industry has long been a staple of American communities, offering affordable products and convenience to budget-conscious shoppers. However, the recent surge in inflation and supply chain disruptions has presented challenges for these discount retailers. Here, we will explore how inflation is affecting the dollar store sector and we’ll delve into the implications for consumer spending habits, and how Triple Net Lease agreements all play a vital role in the dollar store industry.

The Dollar Store Industry and Its Resilience

The dollar store industry comprises a range of retailers, including major players like Dollar General, Dollar Tree, and Family Dollar. These stores typically offer a wide variety of household essentials, snacks, party supplies, and other affordable items. The industry has enjoyed steady growth over the years, attracting a diverse customer base seeking value for their money.

Supply Chain Disruptions and Rising Costs

Dollar Stores & Inflation | A well-stocked dollar store with shelves full of affordable products In recent times, the dollar store industry has encountered significant supply chain disruptions, driven by various factors such as transportation challenges, labor shortages, and increased raw material costs. These disruptions have led to increased prices for goods, making it harder for dollar stores to maintain their core value proposition of offering products for $1 or less. As a result, both consumers and dollar store operators are feeling the impact of rising costs.

Inflation’s Effect on Consumer Spending Habits

Inflation erodes the purchasing power of consumers, leaving them with less disposable income. As prices for everyday goods increase, consumers may need to adjust their spending habits and allocate more of their budget to essential items. Although inflation can present difficulties such as reduced profit margins and higher lease costs, dollar store merchants, particularly those operating under triple net leases, can potentially capitalize on rising demand and gain a competitive edge thanks to their affordable product offerings. Nonetheless, retailers must remain vigilant in monitoring their expenditures, nurturing supplier partnerships, and adjusting their pricing strategies in order to effectively navigate the potential consequences of inflation.

The Importance of NNN Net Lease in the Dollar Store Sector

NNN (Triple Net Lease) agreements play a vital role in the dollar store industry. NNN leases shift various property expenses, such as property taxes, insurance, and maintenance, from the property owner to the tenant. These leases provide stability for dollar store operators by freeing up capital that can be spent on expansion and other business expenses rather than being tied up in real estate, allowing them to navigate through inflationary periods with more certainty.

Real Estate Investment Trusts (REITs) and Dollar Stores

What's Next for Dollar Stores? | A dollar store exterior with colorful signage, attracting budget-conscious shoppers

REITs, specifically those specializing in retail commercial real estate , have been active participants in the dollar store sector. The stability of dollar stores as tenants, coupled with the long-term leases often associated with single-tenant net lease properties, makes them an attractive investment option for REITs seeking reliable income streams.

What’s Next for the Dollar Stores?

The dollar store industry is facing challenges due to inflation and supply chain disruptions. Rising costs have forced these discount retailers to adjust, potentially impacting consumer spending habits. However, due to net lease agreements and the interest of REITs and other investors, Dollar Stores have additional capital to invest in stability and growth.

As the dollar store industry adapts to changing market conditions, it remains a valuable resource for consumers seeking affordable options. By closely monitoring inflationary trends and implementing innovative strategies, dollar stores can continue to serve their communities and provide cost-effective solutions in an ever-changing retail landscape.

April 11, 2023

Brisky Net Lease Continues Growth, Expands to North Carolina

MINNEAPOLIS, Minn. (April 11, 2023) – Today, commercial real estate firm Brisky Net Lease (Brisky) announced plans to expand by adding a regional office in Charlotte, North Carolina, effective April 1st. The firm specializes in triple net lease (NNN) transactions and other forms of investment real estate across the United States.

Additional markets are planned with Brisky’s targeted growth strategy. While doing a nationwide search, Charlotte stood out as an excellent fit for Brisky because of its booming economy, diverse talent pool, and appealing quality of life.

“Having a full team of smart, savvy, and client-driven professionals here in Charlotte will allow us to bring our vision and custom-tailored experience to the southeast,” said Brian Brisky, founder and president. Brian added, “The firm has had a great deal of success in the Carolinas already, so coming here made perfect sense.”

Founded in 2010 by Brian Brisky, Brisky is known for excellent client service, transparent communication, and determined results for large institutions, private groups, and individual investors. With more than 90 percent of their 2022 transactions coming from repeat clients, Brisky achieved tremendous results in 2022 and made some excellent strides to continue that trend into 2023.

About Brisky Net Lease

Brisky Net Lease is a commercial real estate brokerage that provides full-scale buyer and seller representation on real estate and triple-net lease properties nationwide. Brisky Net Lease is based in Minneapolis. In 2023, Brisky Net Lease announced plans to open their first regional office in Charlotte, North Carolina. For more information, please contact us at [email protected] or 612-413-4200.

April 06, 2023

What NNN Markets Should I Invest In?

Triple-net leases can be a great investment, but not all markets and states are created equal for your investment dollars. You might be asking yourself what NNN markets are best to invest in.

Great triple-net investment properties exist in all states within the US, but that doesn’t mean that some markets aren’t better suited for your focus. However, it can be difficult to spend the time to research where to invest your NNN dollars. You likely don’t have the time to review market research, review tax policies, and locate available NNN properties.

To help streamline the process and make it easy for you to research your next NNN investment, we compiled a list of top NNN markets.

It is critical to remember that this is still commercial real estate. The basics of finance, long-term investment goals, and the industry of the potential renter all matter considerably when looking to purchase a triple-net property. As always, the location of any property within any geographic area is just as, if not more important, than the market itself. We know as a commercial real estate investment service that investments always come with risk, and none of these markets are immune from it.

The location also matters. Don’t interpret this to mean that every NNN lease within these markets is a sure thing. Take your time to research the particulars of every investment opportunity for the best results. Still, these markets are some of the fastest growing and most vibrant within the country, and for good reason.

NNN Rules of Thumb To Consider

Triple-net lease investing requires a working knowledge of multiple factors to make good decisions. A triple-net lease is a multifaceted agreement, and a unique combination of factors needs to come together to make a favorable location.

Low Tax States: A state lacking a capital gains tax, in particular, will always be a great NNN consideration.
Strong CRE Performance: Generally, if the commercial real estate market is booming in any one location, the better the odds that it’s a solid NNN investment.
Growing Economies: Strong CRE performance correlates to a healthy overall economic outlook.
Low Population Density: This is not a hard-and-fast rule, but growing markets in low-population-density states will offer affordable NNN investments. High population density markets on the coasts will likely see higher investment costs.
Trusted Advisors: If you’re a stranger to these markets, attempting to accurately gauge and assess risk remotely is probably not a good idea. A trusted advisor within the market or the triple-net lease space is a great resource to help you make more informed decisions about any NNN investment.

Now that we’ve gotten all that out of the way let’s dive into specific markets.

NNN Market 1: Arizona

As it turns out, Arizona isn’t just a desert. More and more residents from higher-cost states are turning to Arizona for the low cost of living, and that economic growth has made Arizona a prime location for triple-net leases. Phoenix has been one of the largest growth drivers, but Yuma and Tucson have also become great locations for triple-net leases. Quick-service restaurants and retail pharmacies, in particular, are two tenant types primed for growth within Arizona, and triple-net investors would do well to take note of any investment opportunities within those industries in Arizona.

NNN Market 2: Texas

Texas is an attractive market for triple-net lease investments for a few reasons. First and foremost is the sheer availability of land. Commercial real estate investors love the Lone Star State for its low-cost acreage. Next is a favorable growth rate. Every year, burgeoning markets like Austin, San Antonio, and Dallas receive transplants both from within the state of Texas and across the country. This influx of residents has led to a massive increase in the number of retail stores, quick-service restaurants, and gas stations needed to support this growth. Add in a favorable regulatory environment, and Texas is a great state for a triple-net lease.

NNN Market 3: Colorado

Colorado is not as low-cost as Texas or as spacious, but it does have a growing population and a strong economic situation. Colorado also does not tax capital gains, making growing markets like Colorado Springs and Denver enticing NNN investments. The state is also one of the least densely populated states within the US and is expected to continue to grow in the years ahead.

NN Market 4: The Carolinas

Both North and South Carolina are also solid choices for triple-net lease investments. North Carolina in particular has experienced significant growth in recent years, ringing in as the state with the fourth-highest population growth in 2021. This rapid growth is largely due to steady job growth in the region, which in turn helps ensure that the Carolinas will be a great triple-net lease investment market for years to come.

NNN Market 5: Florida

Florida’s population density is higher than the other markets on this list, but that doesn’t make it any less attractive of a market for NNN leases. The favorable business climate and population growth help Florida. The state’s status as a spring break and vacation destination has also made it a fine state for a NNN investor. We recommend investigating Cape Coral-Fort Myers and North Port and Port St. Lucie, a couple of Florida’s fastest-growing locales, for optimal NNN investments.

Consult Brisky Net Lease For Your NNN Lease Needs

If you’re considering a NNN investment, turn to a trusted real estate investment service to help you navigate the intricacies and trends of the market. If you’re not well-versed in the particulars of any given market, turn to Brisky Net Lease to help guide you through the process.

We help both investors and sellers maximize their time and close mutually-beneficial deals. We offer…

Property Marketing
Underwriting
Tailored NNN Investment Opportunities
& More

Contact Our Commercial Real Estate Brokers For A Free Triple-Net Lease Investment Consultation!

February 17, 2023

SONIC in Raleigh, NC Sold!

Brisky Net Lease represented an institutional seller in the transaction of this Sonic in the vibrant Raleigh, NC market. The NNN Lease had zero landlord responsibilities, & 19+ years of term remaining. The location is operated by franchisee Great American Hospitality with 20 Sonic locations across North and South Carolina. This Sonic has great visibility on a high traffic corner that is located within the Plaza West Shopping Center which is anchored by grocer Harris Teeter and includes several other local and national retailers.

This Sonic is located in west Raleigh, which has excellent demographics and a growing population. The city has ranked as one of the fastest growing cities in the United States, according to Forbes.

SONIC, founded in 1953, is the largest drive-in restaurant brand in the United States with more than 3,500 restaurants in 46 states. SONIC is part of the Inspire Brands family of restaurants. The Inspire portfolio has grown to encompass nearly 32,000 restaurants across more than 70 global markets and all 50 states.

Brian Brisky MN #40546562 | Broker of Record: Brian Brockman NC #298998

November 17, 2022

Gas Stations — A Surprisingly Stable Investment

Savvy investors are always on the hunt for their next venture, and alternative property types have grown in popularity over the years. But one of the most stable alternative investment properties may surprise you: gas station-convenience stores.

Gas stations with attached convenience stores are low-risk, long-term investments that provide income flow for years to come, but there are always many factors to consider before investing in commercial real estate.

Learn about the pros and cons of gas stations as NNN investments and how you can find the perfect investment property with Brisky Net Lease!

Reasons to Consider Purchasing a Gas Station

The gas station-convenience store combination is a seemingly basic idea that significantly impacts our economy and everyday lives. They provide essential services and products that don’t depend on the advancement of technology, keeping them relevant since the invention of the automobile.

Gas stations evolved to fit modern-day customer and market demand by offering reward programs, comprehensive shopping capabilities, partnerships with grocery stores, and more. Even throughout multiple economic crises and significant world events, gas stations’ revenue has continued to grow.

Location

Regarding NNN lease investments, you should always consider a gas station/convenience store’s location before investing in the property. Choosing a site in a high-traffic area with access to drug stores or fast food businesses will bring more people to your location.

NNN Lease Terms

Depending on the tenants, gas station-convenience store NNN leases can run for up to 25 years. You’ll also worry less about the effects of inflation, as there should be set contract terms allowing you to increase the property’s rent.

Regardless of a gas station company’s preferred lease type, you’ll be paid rent, and you won’t have to worry about maintenance or other issues.

Creditworthy Tenants

You should always ensure that your gas station/convenience store tenants have good-standing credit, a low risk of defaulting on loans or payments, and be financially stable.

As an NNN lease investor, it’s important to always do your due diligence and perform a financial assessment for the potential tenant to protect yourself and your investment.

Potential Risks

No investment comes without risk, so it’s important to acknowledge the potential risks of owning a gas station. In urban or suburban markets, it can be hard to find an ideal location, as there is a lot of competition and little room for more competitors. On the other hand, locations in rural markets may not enough customers to be profitable due to the smaller population.

There is also a risk of fire or environmental contamination due to possible fuel leaks, combustive materials, and human error. However, you can always minimize the chance of something like this happening by taking preventive safety measures.

Completing regular inspections and equipment maintenance, following safety procedures, and investing in proper insurance coverage are simple things that can make a huge difference.

Choosing a Gas Station for an NNN Lease

The NNN market is moving fast, so you need to know what you want in a gas station and a convenience store before taking the plunge. To help maximize your potential profits, consider hiring a representative before negotiating lease terms, as a high ROI is the ultimate goal.

Another important factor when considering investing in a gas station-convenience store is the property’s condition and curb appeal.

A gas station that looks worn down will not generate the same income as a “nice-looking” one, and you might spend more money on updates and repairs.

Choose an NNN Lease Partner You Can Rely On

For help finding the perfect NNN investment property, get in touch with the professionals at Brisky Net Lease. Our professional team can identify the best properties in the best locations — helping you meet your financial goals.

With our extensive commercial real estate track record, you’ll walk into your next lease negotiation confidently and with an experienced team on your side.

Contact us today to learn more about our available properties and buyer representation services.

November 14, 2022

NNN Ashley Homestore | Michigan | SOLD!

Brisky Net Lease represented the seller in the transaction of this NNN Ashley Homestore in Flint, MI. The newly remodeled location is situated along a busy retail corridor and features a large parking lot and pylon sign with excellent street visibility of more than 20.5K vehicles per day. This low rent, excellent investment property is operated by a strong multi-unit franchisee and has high foot traffic, according to Placer.

Flint, Michigan is the largest city and the county seat of Genesee County. The city is located in the heart of Michigan along the Flint River, about 66 miles northwest of Detroit and 55 miles northeast of Lansing.

Ashley is a home furnishing retailer that first opened in 1997 in Anchorage, Alaska. Ashley is the number 1 furniture retailer in the U.S. and one of the world’s best-selling furniture store brands with more than 1,050 locations in over 60 countries.

Brian Brisky MN #40546562 | Broker of Record: Brian Brockman MI #6502428679

November 03, 2022

The Differences Between a Corporate NNN Lease and a Franchise Lease

Corporate NNN and franchise leases are two of the most debated types of leases in the commercial real estate world. An NNN (or triple net) lease benefits landlords since it absolves them from most risks. On the other hand, a franchisee lease is a beneficial agreement for the franchisor, but it comes with more potential risks for the landlord.

In this blog, we’ll discuss the differences between the two types of leases and what to look for when considering an investment.

Corporate NNN Lease Properties

Landlords of Corporate NNN properties often experience more security and less risk. These properties are low-maintenance for the owner since the tenant pays for any property-related expenses, like structural maintenance, repairs, insurance premiums, and real estate taxes.

Corporate NNN property owners can easily predict their cash flow from the property, proven to be more stable over a more extended period.

In many cases, the tenant expects the landlord to charge a lower base rent and have low-risk cap rates since they cover all additional expenses. Tenants also expect favorable termination clauses.

Franchisee-Owned NNN Lease Properties

For franchisee-owned properties, investors should always up their risk expectations when considering their return. There is a lot of online competition in the franchise market, so it’s wise to practice more caution.

Franchisees are becoming more particular about their operators and locations — their main priority is now a specific property’s performance and sales due to high competition levels in the market. Agreeable cap rates have also encouraged them to invest in real estate expansion after selling their other locations during the market’s peak.

Measures of Protection

Real estate is not a risk-free business, so you should always prepare for unexpected situations.

1. Do Your Research

It’s important to note that lenders are usually cautious regarding franchisee-leased properties. Investors who plan to use debt to acquire franchise net-lease properties should prepare to contribute between 50% and 60% equity.

Study the brand or franchise’s market position and value before signing anything — if you see any red flags, it’s probably best to avoid the situation altogether.

2. Experience and Finances Matter

Other things to examine closely are a franchise’s finances and length of experience. A well-established franchise or brand should have a solid financial record and investments in diverse assets.

Entering an NNN lease agreement with no collateral means taking a risk you might not want to take.

To avoid future issues, landlords and investors should request insight into a franchise’s financials. Their financial statements will show whether or not there is a need to ask for a guarantor; it’s a small step that provides great comfort.

Consult your Corporate NNN & Franchisee Lease Expert

When deciding between a corporate NNN lease or a franchisee lease, Brisky Net Lease can advise you on what is best for your situation and finances. We remain at your side throughout the process and ensure you get the most out of your money.

As experts on the NNN commercial real estate market, we help our clients achieve their financial goals — no matter what type of investment they’re considering.

Get in touch with our brokers today to learn about our various market opportunities or to learn more about our process.

October 12, 2022

NNN Kum & Go | Arkansas | SOLD!

Brisky Net Lease represented the seller in the transaction of this NNN Kum & Go convenience store in Bono, AR. The location is a strong performer with data to back it up, giving the investor an excellent opportunity to invest in the 18th largest convenience store operator, according to CStore Decisions. The large format store with a large 2.4 acre lot has excellent visibility along a major thoroughfare in town.

Kum & Go is a family-owned operation run by Kyle J. Krause, son and grandson of the original founders. The company employs over 5,000 associates in more than 400 stores across 11 states. Kum & Go is part of Krause Group, a family of businesses which also includes Solar Transport, the Des Moines Menace soccer team, and Italian wineries Vietti and Enrico Serafino, in addition to real estate and agriculture operations.

Brian Brisky MN #40546562 | Bang Realty-Arkansas Inc – License #PB00082359

October 10, 2022

NNN Goodwill | Georgia | SOLD!

Brisky Net Lease represented an institutional buyer in the transaction of this NNN Goodwill in Georgia. The 46,000 SF building had 12+ years remaining on the lease with rent increases every 5 years. The property has great visibility off a major highway and is surrounded by several other national and local retailers. This location is a mission critical asset for Goodwill as it serves a dual purpose for their organization, as both a retail store as well as a career center. Goodwill’s career centers are funded by merchandise sales in Goodwill’s retail training stores, and their Job Connection-Career Center services are provided at no cost to job seekers. Part of Goodwill Southern Rivers, which has seventeen locations throughout South Carolina, Georgia, and Alabama serving an average of 17,000 job seekers annually and placing more than 6,000 in employment.

Cameron Cropsey MN #40555735 | Broker of Record: Brian Brockman, Bang Realty GA #378952

September 26, 2022

NNN Panera | Spartanburg, SC | SOLD!

Brisky Net Lease represented an institutional seller in the transaction of this recently opened Panera Bread in the terrific Spartanburg, SC community. The NNN Ground Lease has zero landlord responsibilities and healthy rent bumps every five years. The building, occupied by the top ranked brand, has a great location situated on a hard corner with a signalized intersection where it receives excellent visibility along a busy retail corridor. Panera operates as Panera Bread®, Saint Louis Bread Co or St. Louis Bread Company in 48 states, the District of Columbia and Canada. Panera Bread is part of Panera Brands, one of the largest fast casual restaurant platforms in the U.S.

Brian Brisky MN #40546562 | Broker of Record: Brian Brockman, SC #108250