Dive Brief:
- Refuel Operating Company has sold the real estate for 41 of its c-stores to real estate investment trust Getty Realty Corp. for $260.9 million, the companies announced on Tuesday.
- The portfolio includes 17 sites in South Carolina, 12 in North Carolina, seven in Texas and five in Mississippi, according to Getty’s announcement. Each store has a large-format design that includes Refuel’s proprietary hot food offerings and/or branded QSRs, and averages nearly 2.5 acres per site, Getty said.
- The transaction is a sale-leaseback, meaning Refuel will continue to operate all locations under long-term leases, per the retailer’s announcement.
Dive Insight:
Refuel, which operates about 250 convenience stores across five states, is selling around 16% of its c-store real estate portfolio as part of a broader debt refinancing, according to the retailer’s announcement. Refuel also closed a new senior secured credit facility to refinance its existing debt.
Refuel said in its announcement that the transactions should “create a more balanced mix of owned versus leased real estate while preserving a substantial owned real estate portfolio.” Additionally, the new credit facility is expected to “materially reduce” Refuel’s annual interest expense and improve its overall financial position.
The transaction marks Refuel’s first sale-leaseback in company history, according to Getty.
“Since inception, Refuel has been focused on assembling a portfolio of high-quality stores in attractive markets with significant real estate ownership,” Travis Smith and Jon Rier, co-CEOs of Refuel, said in Refuel’s announcement. “This transaction exemplifies the benefits of that strategy, allowing us to unlock significant value while maintaining a highly attractive network of stores and a strong balance sheet.”
Refuel was already a tenant at six Getty-owned convenience stores, five of which were new-to-industry sites at the time of development, according to Getty. Following the deal, Refuel will become Getty’s third-largest tenant, representing nearly 8% of the REIT’s annualized base rent, Getty said.
“Refuel is one of the leading operators in the convenience store sector, and its premium brand, growing platform, and high-quality real estate align well with Getty’s underwriting criteria for convenience store acquisitions,” Christopher Constant, president and CEO of Getty, said in the announcement.
