Acropolis Commercial Advisors LLC

Aldi announced plans to open approximately 150 additional stores

lachanceWeb — Wed, 23 Mar 2022 21:08:55 +0000

Last month, Aldi announced plans to open approximately 150 additional stores (currently over 2,100 stores total) and expand their curbside pickup option to 300 additional stores (currently over 1,200 stores total) across the United States by the end of 2022. ALDI currently has a presence in 38 states, which is a rarity amongst grocers. These plans will put ALDI on pace to become the 3rd largest grocery retailer, by count, in the US.

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Dollar Tree announced that their signature $1.00 prices would increase to $1.25

lachanceWeb — Mon, 14 Mar 2022 20:42:46 +0000

In late November Dollar Tree announced that their signature $1.00 prices would increase to $1.25. While Dollar Tree maintained their $1.00 prices for over 35 years, they too were not immune to rapid inflation. Despite this, over the last 6 months, the company’s stock (Nasdaq: DLTR) has increased by over 65% and continues to climb. Along with their increase in price, Dollar Tree announced their Dollar Tree Plus! platform which will offer an assortment of products for $3 and $5. This is expected to roll out to 1,500 stores by the end of 2022 and 5,000 stores by the end of 2024.

ACA continues to see strong demand for single-tenant Dollar Tree assets with cap rates decreasing upwards of 100 basis points (location dependent) since the beginning of 2021.

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ACA continues to see cap-rate compression

lachanceWeb — Fri, 04 Mar 2022 14:56:42 +0000

Since 2021 there have been numerous multi-billion portfolio acquisitions, including several REIT mergers and buy-outs. These transactions have created enormous scale which have improved buying power and decreased cost of capital. This has in-turn made many of these companies more aggressive on pricing and further shifted the market, forcing other buyers to be more completive. Even with interest rates up, ACA continues to see cap-rate compression for certain asset classes and tenants.

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ORLY reported sales of $13.3 billion for FY2021, a 15% increase from 2020

lachanceWeb — Thu, 24 Feb 2022 18:27:58 +0000

Throughout the pandemic, O’Reilly Auto was one of many essential retailers to see their sales grow substantially. As lockdowns forced consumers to stay at home, many used the prolonged period of extra spare time to perform maintenance and mechanic work on their vehicles. Many questioned whether these sales would continue as lockdowns and restrictions ended, but ORLY reported sales of $13.3 billion for FY2021, a 15% increase from 2020. As inflation continues to rise, new vehicles are extremely difficult for the average consumer to obtain and with used car sales prices up 28% on-average from 2020, hopeful car buyers are forced to hold on to their current vehicles, fueling the continued demand for parts.

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CVS reported a huge $8.9 billion growth

lachanceWeb — Tue, 15 Feb 2022 19:02:10 +0000

CVS recently reported an increase of $24.4 billion in revenue for 2021, an increase of over 8.7% from 2020. While front store sales have declined over the last few years, CVS reported a huge $8.9 billion growth increase in retail sales, of which 45% can be attributed to Covid vaccines and testing. With 55% of the revenue not (directly) tied to Covid, it is clear that CVS has generated new and repeat customers during the pandemic.

Over the last year, ACA has sold 24 CVS stores with remaining lease terms ranging from 1 to 19 years. The CVS market has attracted a diverse buyer pool including REITs, private funds, and individual investors. This has created additional competition for these assets which has in turn driven cap rates down.

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