Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale leaseback of a Pilot Travel Center located at 901 Bankhead Highway West in Birmingham, Alabama. The 9,790-square-foot convenience store sold for approximately $9.4 million reflecting a 7.0 percent cap rate. Matt Lipson and Mike Philbin of Stan Johnson Company represented the buyer, Brodersen Management Corporation based in Milwaukee, Wisconsin. The seller was Acworth, Georgia-based Mountain Express Oil Company.
“This was a great deal for the buyer and tenant,” said Lipson, Associate Director in Stan Johnson Company’s Portland, Oregon office. “The tenant was purchasing a location from Pilot and rather than use traditional business financing, they found a real estate buyer to help fund the acquisition. Since you have to merge an asset purchase agreement with the purchase and sale agreement to ensure a simultaneous close, structuring a sale leaseback to fund an M&A is slightly more challenging than a typical net lease transaction. However, both parties maintained healthy communication and were experienced enough to get this across the finish line.”
The property was originally built in 1995 and includes a Wendy’s quick service restaurant on-site. The 7.4-acre parcel is strategically located just north of Interstate 20 at a signalized intersection.
“I like these types of transactions because the buyer is able to purchase an attractive net lease asset at a higher yield than a traditional deal, and the tenant is able to get into the property free of loan contingencies and with limited acquisition costs,” Lipson added. “Our client is also thrilled that their new tenant will have plenty of working capital that would normally be reserved for the cost of an acquisition.”