Tenant Description

Family Dollar is a US-based chain of discount retailers. Recently acquired by Dollar Tree, Inc. in July 2015, together they are considered the nation’s largest small-box discount retailer, operating over 14,000 stores nationwide. Family Dollar runs under a landlord friendly net lease structure. Freestanding Family Dollar retail stores provide an attractive combination of a long-term lease, and a growing market concept, that continues to capture value conscious shoppers – consequently boosting store productivity. The average size of a Family Dollar store is between 6,000 to 8,000 square feet, and most stores operate in leased facilities. Their small footprint allows the company to open new stores in rural areas and small towns and large urban neighborhoods alike. A standardized floor plan used in each store allows customers to easily shop for their favorite products in any Family Dollar store. This uniform layout and product selection range enable store managers to focus on superior customer service. Their vision of a self-serve, cash-and-carry neighborhood discount store in low to middle income neighborhoods has proven to be so successful that today Family Dollar boasts a chain of over 8,000 spanning from Maine to California. With locations across 48 states, Family Dollar retail stores allow investors to evaluate property in metropolitan and rural settings across the US. The typical Family Dollar net lease is 15 years with successive option periods of five years apiece. The lease also includes rent increases of 10% every five years and during the subsequent options. The Family Dollar net lease typically requires minimal responsibility from the landlord, limited only to roof & structural maintenance while the tenant is responsible for insurance, taxes and all other maintenance and repairs. Recently, Family Dollar has offered sale leasebacks with 15-year NNN leases along with build-to-suit programs that are structured as 15-year absolute NNN leases with 10% rent increases in year 10 or every five years. In summary, their concept is an utterly simple and effective one: as per their founder Leon Levine, “The customers are the boss, and you need to keep them happy.”

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