Dollar Tree

Dollar Tree, Inc. operates variety retail stores in the United States and Canada. It operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of 1.00. It provides consumable merchandise, including candy and food, and health and beauty care products, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food; various merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, and other items; and seasonal goods, which include Valentine’s Day, Easter, Halloween, and Christmas merchandise. This segment operates under the under the Dollar Tree and Dollar Tree Canada brands, as well as 11 distribution centers in the United States and 2 in Canada, and a store support center in Chesapeake, Virginia.

The Family Dollar segment operates general merchandise discount retail stores that offer consumable merchandise, which comprise food, tobacco, health and beauty aids, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as blankets, sheets, and towels.

It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise, which include Valentine’s Day, Easter, Halloween, and Christmas merchandise, as well as personal electronics that comprise pre-paid cellular phones and services, stationery and school supplies, and toys. This segment operates under the Family Dollar brand, 11 distribution centers, and a store support center in Matthews, North Carolina. As of January 28, 2017, the company operated 14,334 stores in 48 states and the District of Columbia, and 5 Canadian provinces. Dollar Tree, Inc. was founded in 1986 and is based in Chesapeake, Virginia.

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S&P Rating: BBB-
Moody Rating: N/R

Typical Lease Characteristics

Lease Term: 10 – 15 Years  Years

Lease Type: Absolute NNN Lease and Double net lease 

Lease Increases: 10% Every 5 years 

Lease Extensions: 4-5 (5) Year Options

Lease Guarantor: Corporate

Tenant Overview

Dollar Trees typically offer favorable favorable cap rates when considering the company’s size and rating. Although these stores can be a good investment, it is important to take into consideration demographics, and market rental rates since these stores are often times located in more rural locations.

Positives:

  • Public Company, Credit Rated
  • NNN lease eliminates landlord responsibilities
  • Typically Long term leases with increases

Negatives:

  • Demographics not always favorable
  • Locations may pose re-tenanting issues
  • Competitive Industry Sector

Market Snapshots:

On Market Ranges:

# of Properties in set: 10

Price: $1,864,050 - $2,119,130Average: $1,962,154

PPSF: $170 - $210Average: $184

Year Built: 1935 - 2018Average: 2005

CAP Rate Range: 6.42% - 8.24%Average: 7.29%

Size range: 8,000 sq ft - 15,120 sq ft Average: 9,995 sq ft

Last 12 Month Range:

# of Properties in set: 22

Price: $1,815,080 - $2,130,740Average: $1,972,911

PPSF: $154 - $195Average: $177

Year Built: 1955 - 2017Average: 2002

CAP Rate Range: 5.89% - 7.48%Average: 6.92%

Size range: 8,300 sq ft - 18,000 sq ft Average: 10,567 sq ft

Dollar Tree Company Profile

Headquarters Information

Chesapeake, Virginia

Founded in 1986

Company type: Public

Stock Ticker: DLTR

Sector: Services

Industry: Discount, Variety Stores

# of Employees: 55,300

S&P Rating: BBB-
S&P Rating: N/R

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Dollar Tree Stock Keys

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