Dollar Tree building loan:
Loan Product for a Dollar Tree or Family Dollar store. Below is a summary of one of several products available through Caffrey & Company, LLC for a Dollar Tree Building Loan also known as Credit Tenant Financing. Rates are as of September 16, 2020. We can work with 1031 Investors to acquire a Dollar Tree or a Family Dollar store.
National Credit Lease Program Highlights for a Dollar Tree building loan as you know Family Dollar is now part of Dollar Tree:
- Loans from $750,000 to $10,000,000 and up
- Multiple structures offered
Including 10 Year Fixed Rate
- Typical rates presently ranging from 3.79% to 3.99%
- Typical amortization: 25 years to 30 years
- Most require a minimum down payment between 20% and 25% of the purchase.
- Caffrey Loan Placement fee 1.0%
- Typical recourse: 20% to 25% Limited
- Flexible prepayment with extra 10% annual paydown allowed with no premium charged
- Minimum remaining primary lease term: 7 Years
- All loans assumable, with only ¼% fee
- Optional 50-day rate lock available
- Rate Lock—50 days from CCL acceptance and deposit submission
- Expedited closing process targets 33—35 days, CCL to potential closing table
Financial Background on Dollar Tree:
Dollar Tree, Inc. is a leading operator of discount variety stores that has served North America for more than thirty years. The Company operates more than 15,200 stores across the 48 contiguous states and five Canadian provinces, supported by a coast-to-coast logistics network and more than 193,000 associates. Dollar Tree is known for its “thrill-of-the-hunt” shopping experience where customers discover new treasures every week all priced at $1. Family Dollar, known as “the neighborhood discount store,” provides customers with a quality, high-value assortment of basic necessities and seasonal merchandise all generally priced at $10 or less. In 2019, the Company consolidated its store support centers into a newly-completed office tower in Chesapeake, Virginia.
Here are highlights from the Second Quarter financial reports.
Second Quarter 2020 summary on Dollar Tree:
Second Quarter Results Consolidated net sales increased 9.4% to $6.28 billion from $5.74 billion in the prior year’s second quarter. Enterprise same-store sales increased 7.2%. Same-store sales for Family Dollar increased 11.6%. Dollar Tree same-store sales increased 3.1%. Gross profit increased 16.2% to $1.92 billion in the quarter compared to the prior year’s second quarter. As a percentage of net sales, gross margin increased 180 basis points to 30.5%, compared to 28.7% in the prior year’s quarter. The increase in gross margin was driven by improved merchandise costs including freight, leverage on occupancy costs from stronger same-store sales, reduced markdowns and improved shrink results, partially offset by higher distribution costs, which included $11.4 million in COVID-19-related payroll costs, and incremental tariffs of approximately $10.8 million.
Selling, general and administrative expenses were 24.5% of net sales compared to 24.0% of net sales in the prior year’s second quarter. The increase was driven by COVID-19 costs of $123.5 million, or 197 basis points, related to frontline associate wage premiums, field management bonuses and store supplies. Operating income for the quarter improved 39.4% to $374.9 million compared with $268.9 million in the same period last year and operating income margin was 6.0% in the current quarter compared to 4.7% in last year’s quarter. The second quarter of 2020 included total incremental operating costs of $134.9 million for COVID-19-related expenses. These incremental costs by segment were $76.6 million for Dollar Tree, $57.1 million for Family Dollar and $1.2 million for Corporate and Support. Additionally, during the second quarter of 2020, the Company experienced store damage, lost inventory, and other costs of $16.8 million related to civil unrest in certain communities, comprised of $11.7 million at Family Dollar and $5.1 million at Dollar Tree. Together, expenses related to COVID-19 and civil unrest for the quarter were $151.7 million, or $0.49 per diluted share. Net income was $261.5 million in the second quarter and diluted earnings per share for the quarter increased 44.7% to $1.10, compared to $0.76 per share in the prior year’s quarter. The Company opened 131 new stores, expanded or relocated 22 stores, and closed 26 stores. Additionally, the Company completed 76 renovations to the Family Dollar H2 format. Retail selling square footage at quarter end was approximately 123.1 million square feet.
Many loan products are available on properties support by long term leases from Dollar Tree, Inc or from Family Dollar. Below find current credit rating from Moody’s and Standard and Poors (S&P):
Investment Grade Credit Ratings for Dollar Tree Building Loans:
For Dollar Tree, Inc. Moody’s reports an investment grade credit rating of Baa3 with a Positive Outlook as of September 2019. Standard and Poors (S&P) issued an investment grade credit rating of BBB-, Stable Outlook as of March 8, 2018.
Looking for a different loan? Need help with a 1031 Exchange in purchasing a Dollar Tree store, we can help. For more sample rates checkout Commercial Real Estate Loan Rates on our web site.
Caffrey & Company LLC has been your source of commercial real estate loans since April of 2000. Send details on your credit lease transaction for a free loan quote.
On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.