Circle K Tenant Overview


Net Lease Advisor Tenant Circle K

Pros

  • Investment grade corporate guaranty
  • Strong intrinsic real estate, usually located at a highly trafficked intersection
  • Fully passive NNN lease with periodic rental increases
  • Advantageous accelerated depreciation on improvements due to nature of tenant's business

Cons

  • Environmental concerns over petroleum products, although tenant fully indemnifies landlord
  • Smaller sites pose hurdles for potential redevelopment

Tenant Description

Circle K, a leading name in the convenience store sector for over 60 years, exemplifies a premier tenant in the net lease and NNN investment landscape. This well-regarded chain operates under the umbrella of its parent company, Alimentation Couche-Tard Inc., a giant in the convenience store industry with an investment-grade corporate guarantee. Circle K's appeal to net lease investors is significantly enhanced by its strategic site selection—each of its over 14,000 stores globally, including 6,847 in the U.S., is positioned at high-traffic intersections, maximizing visibility and accessibility.

Investors in Circle K's properties benefit from fully passive NNN leases, a desirable arrangement where tenants are responsible for all costs associated with the property, including maintenance, taxes, and insurance. This structure, coupled with the possibility of leveraging accelerated depreciation on building improvements, particularly for locations with gasoline sales, presents an attractive investment proposition.

Circle K's real estate footprint typically includes diverse property sizes, with stores ranging broadly in square footage to accommodate their varied retail offerings, from basic convenience items to food services and fuel. While specific asking prices for Circle K properties are subject to market conditions and locations, investment in Circle K's real estate is often considered lucrative due to the brand's strong market presence and the backing of Alimentation Couche-Tard.

As the largest independent operator of company-run convenience stores in North America, Alimentation Couche-Tard's portfolio extends beyond Circle K, including brands like Couche-Tard, Kangaroo Express, and Mac's. The company's strategic acquisitions, such as Topaz in Ireland, underscore its commitment to expanding its retail footprint and consolidating its market position under the Circle K banner internationally, with Quebec's Couche-Tard locations remaining an exception due to local market nuances.

Average Cap Rate
5.13%
Trailing 12-month average
Average Property & Lease
Average Sale Price $3,446,394
NOI $180,543
$/Square Foot $567 - $1,276
Building SF 2,000 - 4,500
Lot Size 0.5 - 1.0 Acres
Lease Term 10 - 15 Years
Escalations 5 - 10% Every 5 Years
Stock Symbol ANCUF
Credit Rating
S&P BBB+
Moody's Baa1
Average Cap Rate Trend
5.11%
2023
5.13%
2024
Rates reflect year-over-year comparison
Recent Sales Comps
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