7-Eleven - 101 State Highway 31 W
Listing Highlights
- •15 Year Absolute NNN Lease
- •Zero Landlord Obligations
- •Sale Price: $4,173,913
- •Building Size: 8,500 SF
- •Corporate Guaranty: Investment Grade Credit
- •7-Eleven Corporate (S&P: AA-)
- •Located in Strong Texas Market
- •Income Tax Free State
Sergio Lopez
TAG Industrial
Tenant Details
Lease Details
Narrative Summary
This is a 15-year absolute triple net lease commencing 2020-06-15 on an 8,500 SF convenience store in Chandler, TX, with initial base rent of $240,000 / year ($28.24/sqft), 7.5% rental escalations every five years (to $258,000 in Years 6-10 and $277,350 in Years 11-15), and three 5-year renewal options at like escalations beginning 2035. Tenant is responsible for all operating expenses and holds a corporate guarantee from 7-Eleven.
Lease Options
Lease Analysis
Tenant Favorable
- Zero landlord obligations
Investor Favorable
- Absolute NNN lease
- 7.5% rental increases every five years
- Corporate guaranty by 7-Eleven
* Indicates the lease ends during this calendar year. The displayed value is an annualized projection.
Investment Highlights
- 15-year absolute NNN lease with zero landlord obligations
- Investment-grade corporate guarantee from 7-Eleven (S&P AA- rating)
- Built-in 7.5% rent escalations every 5 years providing inflation protection
- 9.7 years remaining lease term with three 5-year renewal options
- Strategic highway frontage location on State Highway 31 W
- Texas market benefits from no state income tax
- Stable 6.18% cap rate with predictable cash flows
Risk Factors
- Single-tenant concentration risk - 100% dependent on 7-Eleven's continued occupancy
- Tertiary market location may limit liquidity and buyer pool
- Long-term lease commitment reduces flexibility for rent growth beyond built-in escalations
- Renewal risk in 2035, though mitigated by three 5-year options
- Absolute NNN structure provides no landlord control over property condition
Feature Tags
Underwriting Insights
Key underwriting considerations include the absolute NNN lease structure eliminating landlord risk, investment-grade corporate guarantee providing credit security, and built-in 7.5% rent escalations every five years. The 6.18% cap rate reflects the high-quality credit and long lease term. Sensitivity analysis should focus on renewal probability given single-tenant exposure.
Analyst Notes
This represents a textbook core NNN investment with exceptional tenant credit quality and lease structure. The 6.18% cap rate reflects the security and predictability of cash flows from an investment-grade tenant. Key value proposition is the absolute NNN structure eliminating all landlord responsibilities and risks, combined with built-in rent growth through scheduled escalations. The 9.7-year weighted average lease term provides substantial income stability, while three renewal options extend potential cash flows to 2050. Ideal for investors seeking passive, stable income with minimal management requirements. Single-tenant concentration is the primary risk, though significantly mitigated by 7-Eleven's strong credit profile and operational track record.