Just Sold: Wawa in Vero Beach, FL

Ground + Space today announced the sale of a new Wawa property in Vero Beach, Florida. Michael Zimmerman exclusively marketed the property, which sold for the full asking price to an all-cash 1031 buyer. This listing garnered multiple offers thanks to the property’s strong corporate tenant and Wawa’s status as an essential retailer.

Wawa convenience stores are one of the most sought-after net lease investments on the market today. Wawa sites offer investors long-term security and no maintenance or management responsibilities thanks to a Ground lease structure. Wawa convenience stores are located on prime real estate, typically at hard corner locations with great visibility and ingress/egress. This particular Wawa location has full access via Old Dixie Highway and additional exposure on three main roadways. Although the area surrounding the property is mostly zoned for industrial use, visitors have easy access to Vero Beach Regional Airport and Disney’s popular Vero Beach Resort.

Situated along Florida’s Treasure Coast, this newly constructed Wawa sits within Indian River County, Florida’s seventh-richest county by per capita income. The average annual household income within just three miles of the site is nearly $85,000. Additionally, the area immediately surrounding this Wawa has seen a population boom, growing an average of around 18 percent within a five-mile radius over the past decade.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Good News: Retailers Grow Despite Pandemic

Economists expect retail sales to increase approximately 1.9 percent this month. While any increase is good news, it’s a significant drop off from June’s increase of 7.5 percent. Not all hope is lost, however, at least not for some major retail tenants. Today, we take a look at some of the retailers who are making moves and shattering records, even amidst a global pandemic.

7-Eleven

7-Eleven recently entered into a definitive agreement with Marathon Petroleum Corp. (NYSE: MPC) to purchase the Speedway convenience store chain for $21 billion in an all-cash transaction. The arrangement is expected to conclude in the first fiscal quarter of 2021 and includes a 15-year fuel supply agreement for 7.7 billion gallons per year associated with the Speedway business. This large-scale deal includes approximately 3,900 convenience stores. These additional stores will bring 7-Eleven’s retail footprint to roughly 14,000 locations throughout the United States and Canada.

At Home

At Home’s CEO recently told CNBC that the company has been slowly expanding its store count by roughly 20 percent per year over the past seven years. The home décor and furnishings retailer currently has 219 locations but may expand to as many as 600 thanks to record-breaking net sales in its second fiscal quarter. Thanks to its listing as an “essential retailer,” At Home boasted net sales of $515 million in its most recent quarterly filing. What’s behind the increase? At Home is a one-stop-shop for a broad range of home goods, and the store’s open, spacious layouts and the brand’s omnichannel platform allowed the company to easily accommodate COVID-19 regulations.

Chili’s and It’s Just Wings

Brinker International, Inc. (NYSE: EAT), the parent company of Chili’s and Maggiano’s, recently introduced a delivery only-service called “It’s Just Wings.” Since launching in late June, this concept is now on track to exceed $150 million in sales during its first year. So, how does It’s Just Wings work? Brinker International is utilizing what it calls “ghost kitchens”—restaurants with a delivery service instead of a dining room. The “ghost kitchen” concept involves setting up kitchens that only make food for customers who order online, through mobile apps or via third-party delivery services. Instead of using independent kitchen space, It’s Just Wings now operates using separate, dedicated kitchen areas in 1,050 of Brinker’s U.S. Chili’s and Maggiano’s restaurants. This new concept—along with the established pick-up and delivery services already in place under the Brinker International umbrella—have generated strong bottom-line results.

CVS and Publix

Both of these leading retailers have seen a marked increase in year-over-year sales. Both companies benefitted from their status as “essential retailers” during the COVID-19 pandemic. CVS Health Corp. (NYSE: CVS) reported a 35.2 percent increase of $634 billion in the company second fiscal quarter of 2020. The company’s net income also rose to $5 billion (a 48 percent increase). Although CVS plans to close 22 underperforming stores, the remainder of its locations have remained open since the pandemic was first declared a national emergency on March 13, 2020. Publix has also remained open throughout the pandemic. Within its second quarter earnings report, Publix announced that sales have increased by 21.8 percent. Publix estimates that its second quarter sales increased by $1.5 billion due to the pandemic.

Starbucks

Although Starbucks Corp. (NASDAQ: SBUX) saw a decline in U.S. comparable store sales during its third quarter, the company still opened 130 net new stores. This marks a five percent year-of-year unit growth. The company currently operates or licenses approximately 15,243 locations in the United States and 32,180 worldwide. As of late July, Starbucks has opened roughly 97 percent of all its company-operated stores, both in the United States and China. Temporary closures affected locations in airport and college and university locations within North America.

Navigating These Uncertain Times

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The market changes daily, so please contact one of our brokers for specialized guidance during this time.

Stay Healthy and Safe

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


COVID-19 CRE News: July Updates

Thanks to a surge of COVID-19 cases in new hotspots across the country, commercial real estate investment activity has slowed considerably. The Ground + Space team have been hard at work tracking the effects of the novel coronavirus on the commercial real estate industry, both in our home state of North Carolina and beyond. Below, we take a look at some of the top headlines from the first half of the month of July:

Decline in National Investment Activity

Owners and investors remain cautious regarding sales of retail assets. This trend has permeated markets across the country, especially those in fast-growing cities. Some locales that have seen steep drop-offs in commercial sales activity include Raleigh, Seattle, Nashville, Atlanta and even Washington, D.C. Historically, major markets such as New York, Miami, San Francisco and Los Angeles are the first to recover in terms of sales volume following economic downturns. That may not be the case this time around.

Any future increase sales activity will likely be tied to areas that can sustain recovery from both a public health and economic standpoint. There is a glimmer of hope on the horizon: Most markets around the country saw an increase in deal volume in the month of June. This could signal an uptick in deal velocity in the third and fourth quarters of 2020.

Retail Spending Increased in June

Retail sales in the United States rose approximately 7.5 percent in June. This is due to the increase in store openings across the country as retailers welcome back guests to their brick-and-mortar locations. In June and July, consumers have been spending more in four key sectors: automotive, clothing, furniture and electronics.

Although increased retail activity is a welcome harbinger of good news, continued recovery in this sector will be determined by the ability of cities and states to remain open in the face of rising COVID-19 infections. Something important to keep in mind: Despite this increase in activity, total retail sales for the second quarter of 2020 were still down by 8.1 percent.

Retailers Continue to Downsize Footprints

National retailers continue to downsize their retail footprints, and some have even turned to Chapter 11 bankruptcy proceedings for protection. New York & Company parent RTW Retailwinds is just one of many clothing retailers to join the likes of J.C. Penney, Brooks Brothers and Neiman Marcus in filing for bankruptcy.

Banking giant Wells Fargo recently announced a proposed $10 billion cut in annual expenses. This move will shrink the brick-and-mortar footprint of the nation’s third-largest bank substantially. In the short term, Wells Fargo plans to consolidate its brick-and-mortar locations, which would include not only bank branches, but field offices and corporate sites as well. The move comes as more and more Americans move to digital and mobile banking.

A Bit of Good News

While it’s disheartening to hear that many retailers are shutting their doors permanently, others have found a way to pivot their business models to align with recent events. One such retailer is Tropical Smoothie Café. Since March 1, 2020, the fast-casual café concept has opened 35 new locations. Additionally, the company has signed at least 103 new franchise agreements in 2020.

Chipotle is also looking to expand its footprint and plans to hire as many as 10,000 new employees during the next few months. The concept now has a presence in 32 states, and many of its new restaurants feature a drive-thru lane (dubbed “Chipotlane”). Chipotle expects that more than 60 percent of its new restaurants will feature this “Chipotlane”—a measure that will allow more locations to remain open during the pandemic.

Ground + Space is Here to Help

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The IRS 1031 tax deadline is less that one week away, so please contact one of our brokers for specialized guidance during this time.

Stay Safe and Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


COVID-19 Impact on CRE

As the nation works to combat the effects of COVID-19 (the novel coronavirus), there does appear to be some relief in sight for those with commercial real estate investments. In early April, the Internal Revenue Service (IRS) released extended guidance on its earlier decision to extend the country’s tax payment deadline to July 15, 2020. This additional guidance will allow individuals in 1031 exchanges extra time to do identify a replacement property.

What is a 1031 exchange?

Simply put, a 1031 exchange allows investors of commercial property to transfer ownership from one space to another without having to pay taxes. This vehicle for investment allows investors to make real capital gains on their commercial real estate property via exchanging properties that increase in value over time.

How is COVID-19 impacting 1031 exchanges?

Under the new IRS guidance, investors now have more time to both identify and acquire replacement properties within a 1031 exchange. Previously, an investor had 45 days to complete the identification and acquisition processes. The new deadline guidance is as follows:nIf the identification deadline falls between April 1, 2020 and July 15, 2020, the new deadline is July 15, 2020. Likewise, if the 180-day purchase deadline falls between April 1, 2020 and July 15, 2020, the new deadline is July 15, 2020.

The altered guidance will impact both investors and brokers working through the 1031 exchange process. The deadline extensions will help investors avoid some of the immediate impacts of the various shelter-in-place orders. Likewise, there is not as much pressure on investors to identify properties that will close quickly, as opposed to properties that meet specific investment goals.

How can Ground + Space help?

The team at Ground + Space remain committed to providing best-in-class services to our clients during the COVID-19 pandemic and beyond. For more information and customized guidance on how you can leverage your investment for tax incentives, please reach out to Michael Zimmerman and Brett Sheldon.

Are you in a 1031 exchange or interested in maximizing your return on a commercial real estate investment? Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. Contact one of our team members today to find out more about our current listings. Also, you can sign up for our mailing list to stay updated on all we have to offer.