Capital Rivers has an innate ability to uncover what could be considered a ‘needle in a haystack’ type development projects. Capital Rivers was set on identifying and developing new locations in Northern and Central California for Dollar Tree, Inc., a Fortune 500 company and the nation’s largest single-price-point retail chain.
The Challenge.
To secure a location in a market with limited available real estate that both operationally and economically worked for Dollar Tree, but that was also a financially viable project for Capital Rivers.
The Solution.
It was necessary for Capital Rivers to get creative in order to solve this challenge. The solution was to go after “off-market” real estate and that started with identifying every building and property that may be a viable option. In this case it was an existing Hardware & Plumbing store that had been in business for over 40 years, in a building they owned and occupied, and that had potential to be retro-fitted for a Dollar Tree store.
- Capital Rivers utilized it’s in depth market knowledge and strategic mapping capabilities to identify the specific target site.
- Capital Rivers then contacted the owner of the business and real estate directly. After establishing a level of trust and transparency with the owner, Capital Rivers was able to ultimately secure an agreement to acquire the property as well as an adjacent building/lot for the parking lot and loading area.
- Capital Rivers secured a lease with Dollar Tree, acquired the property with a loan from US Bank, and leased it back to the business owner so they could liquidate their inventory. During the liquidation sale among the other things, Capital Rivers pursued its permits, demolished several structures on the adjacent lot, upgraded the buildings electrical from a single to three phase system, installed a loading dock, and created a new parking lot to serve the Dollar Tree store.
The Result.
- Capital Rivers was able to deliver the building and site to Dollar Tree within approximately 60 days from the acquisition date and reduce the cost of the project.
- Dollar Tree secured a new store in an untapped market and was able to open before their scheduled opening date.
- Capital Rivers was creative in its acquisition strategy, value engineered the project, and managed the subcontractors to bring the project in under budget.
- Capital Rivers was ultimately able to achieve an 11.1% Return on Cost; sold the project at a 5.95% Capitalization Rate achieving an 87% Unleveraged Return.
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