Lee & Associates, one of the largest national commercial real estate providers with regional expertise, has completed the $1,900,000 sale (6.59% capitalization rate) of a multi-tenant strip center located at 758-774 Phillips Boulevard in Sauk City, Wisconsin. The 9500 square foot Sauk City Plaza, built in 2014, is anchored by O’Reilly Auto Parts. Other tenants include, Cost Cutters, and World Finance Corporation both of which were on shorter term triple-net (NNN) leases. O’Reilly Auto Parts had 13 years remaining on their lease term at the time of purchase.
Ryan Barr and Ryan Bennett of Lee & Associates – North San Diego County represented the seller, SWD Sauk LLC, CRE in the transaction.
“We have seen a small migration by investors towards the two and three tenant strip center investments in order to find more yield. They are simply not going to get the same yield within the extremely low cap rate environment for single tenant investment properties today” stated Bennett.
“Although, the investment is not entirely free of minor landlord responsibilities, the tenants were still on triple-net leases providing an investor with passive income backed by the investment grade credit of O’Reilly Auto Parts who occupied roughly 70% of the leasable space” said Ryan Barr. “This is a big part of why this asset sold at such an aggressive cap rate by today’s standards for strip centers in smaller markets.”
Barr & Bennett Net Leased Investment Group, of Lee & Associates-North San Diego County, specialize in the acquisition and disposition of net leased assets nationwide.