7-Eleven Tenant Overview


7-eleven, 7eleven, 711, 7-11, net lease, c store

Pros

  • Strong credit and brand recognition
  • If fee simple ownership - accelerated depreciation is available
  • Corporate guarantee
  • Corner locations
  • Essential retail

Cons

  • Environmental concerns with filling station locations
  • Ground leases do not allow for depreciation
  • Privately owned

Tenant Description

7-Eleven, the world's largest operator, franchisor, and licensor of convenience stores, is well-established in the net lease investment market. Known for their strategic corner locations, 7-Eleven stores offer high visibility and excellent access, often accompanied by filling stations which add to their appeal.

Real Estate and Investment Highlights
From a net lease investment perspective, 7-Eleven properties are highly desirable due to their prime locations and robust real estate requirements. Typically situated on sites with high traffic, witnessing approximately 25,000 passing vehicles daily, these locations significantly enhance the underlying value of the net lease properties. The stores often occupy corner locations or shopping center outparcels, with preferred sites ranging from 0.8 to 1.0 acres of land in high-traffic areas. These factors contribute to their strong investment appeal.

Lease Structures and Terms
7-Eleven ground leases are generally 15-20 years in length, featuring rent bumps of 10-15% every five years. This ensures a steady increase in rental income over the lease term. The company's expansion strategy includes non-gas convenience store (C-store) concepts, which fit into smaller retail strip centers, retail condo spaces, and single-tenant locations. These non-gas C-stores typically occupy smaller parcels with buildings ranging from 1,000 to 2,500 square feet. This concept provides investors with opportunities to invest in smaller spaces within high-barrier-to-entry markets, enhancing diversification and potential returns.

Corporate Strength and Market Presence
Founded in 1927, 7-Eleven has grown into an international chain of convenience stores, operating nearly 13,000 company-owned and franchised stores in North America. The company is wholly owned by Seven & I Holdings Co., Ltd., ensuring strong corporate backing and financial stability. This corporate guarantee adds a layer of security for investors, making 7-Eleven net lease properties a reliable and low-risk investment.

Average Cap Rate
5.28%
Trailing 12-month average
Average Property & Lease
Average Sale Price $4,872,364
NOI $251,949
$/Square Foot $1,392 - $1,949
Building SF 2,500 - 3,500
Lot Size Varies (Gas/Non-Gas)
Lease Term 15 - 20 Years
Escalations 10% Every 5 Years
Stock Symbol N/A
Credit Rating
S&P A
Moody's Baa2
Average Cap Rate Trend
4.54%
2023
5.28%
2024
Rates reflect year-over-year comparison
Recent Sales Comps
Austin, TX 5.00%
Everett, WA 5.30%
Nashville, TN 5.50%