Dollar Tree Tenant Overview
Updated: October 21, 2024
Pros
- Higher cap rates
- Lower price point
- Stable, value focused store model
- NNN leases available
- Essential Retail
Cons
- Tertiary market locations
- No increases during primary term
- Shorter lease terms
Earnings Highlights
Earnings Summary
- Same-Store Sales: Dollar Tree +7.8%;
- Comparable Transaction Count: Dollar Tree +9.6%
- Tightening Fiscal 2023 Diluted EPS Outlook Range to $5.78 to $6.08, Including $0.12 per Share Legal Reserve from Q1 2023
Tenant Description
Dollar Tree is a chain of discount stores that are distributed widely across the U.S.
Dollar Tree is an appealing investment opportunity for net lease investors, offering stability and growth potential in the thriving discount retail sector. As a leader in the value-oriented retail space, Dollar Tree serves a broad customer base by providing essential goods at competitive prices, a model that performs exceptionally well across various economic cycles. Its focus on affordability and convenience makes it a resilient tenant, particularly during periods of economic uncertainty when demand for discount retail increases.
Dollar Tree properties are typically secured with long-term, triple-net (NNN) leases, providing investors with a predictable income stream and minimal landlord responsibilities. These stores are strategically located in high-traffic areas, often near residential neighborhoods, ensuring strong and consistent foot traffic. Dollar Tree’s standardized store format and operational efficiency contribute to reliable performance across its extensive portfolio of locations.
Furthermore, the company's ongoing growth strategy and proven ability to adapt to changing consumer needs enhance its investment appeal. With its focus on essential goods and value-driven offerings, Dollar Tree stands out as a recession-resistant tenant. For investors seeking a dependable, low-management net lease asset in a strong retail segment, Dollar Tree properties offer an excellent opportunity to secure long-term returns.
Headquartered in Chesapeake, VA, Dollar Tree is the largest and most successful single-price-point retailer in North America. In June 2015, Dollar Tree acquired Family Dollar Stores, Inc. and its’ more than 8,200 stores, which made Dollar Tree Inc, the leading operator of discount variety retail stores with 13,600 locations. Today, they now operate over 15,500 locations across the US.
Dollar Tree intends to drive future store openings by capitalizing on insights regarding location, target customer profile, competitive dynamics and cost structure. Over the long-term, Dollar Tree plans to operate more than 7,000 Dollar Tree stores and 12,000 Family Dollar stores across the United States.
Average Cap Rate
7.18%
Trailing 12-month average
Average Property & Lease
| Average Sale Price |
$1,809,973 |
| NOI |
$130,712 |
| $/Square Foot |
$151 - $226 |
| Building SF |
8,000 - 12,000 |
| Lot Size |
0.5 - 1.5 Acres |
| Lease Term |
10 Years |
| Escalations |
Varies |
| Stock Symbol |
DLTR |
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
| Gulfport, MS |
6.00% |
| Sunnyside, WA |
6.75% |
| Etowah, TN |
8.00% |
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