Cap rates for Corporate Guaranteed NNN Auto Parts Stores have dramatically compressed over the past 18 months. Your initial inclination of the property is worth substantially more than what you bought it for is actually pretty accurate.
Here’s my logic…
You purchased the property on 5/17/16 for $2,919,600 at a 5.64% cap rate.
The Rent is around $15,000 per, producing an NOI of approximately $180,000.
There are around 10-years of term left on the initial lease.
Current market cap rates for a Corporate Guaranteed NNN AutoZone well located in Florida are ranging from a low of 4.25% to a high of 5.25%.
Even looking at comps outside of the current trend of cap rate compression, the Autozone at 4210 N State Road 7 Coral Springs FL sold for $2,268,000 at a cap rate of 4.80% with 10.0 years term remaining on 12/11/2019.
If we evaluate your property at a 4.50% cap rate, that brings us to a price of $4,000,000.00.
Although not quite double, it a potential gross gain of $1,080,400. Which is not including the rent collected (>~ $750,000).
I think this is worth having a conversation about.
What’s your net lease property worth?
Contact Michael Salafia for an expert opinion of value.