Kingsbarn Realty Capital announced the acquisition of Mills Fleet Farm’s flagship store in Appleton, Wisconsin. The property is comprised of five (5) separate buildings on 32.28 acres. The 431,440-square-foot commercial property includes the flagship retail store (273,175 sq. ft.), an industrial building (143,883 sq. ft.), two gas stations (7,296 sq. ft.), and a car wash building (7,086 sq. ft.). The Fleet Farm triple net lease is for an initial 20-year term with annual rental increases at the rate of 2% (adjusted every 5 years).
“While many retailers are closing stores, Fleet Farm is expanding, having opened six new stores over the past two years,” stated Kingsbarn CEO Jeff Pori. “Founded in 1955, Fleet Farm is a proven product that has been operating for over 65 years. They have an e-commerce resistant product mix, as they are similar to wholesale club stores like Costco, Sam’s Club, and BJ’s Wholesale Club,” Pori further explained. Fleet Farm currently operates 53 stores throughout the upper Midwest.
Fleet Farm was acquired by private equity giant Kohlberg Kravis Roberts & Co. in 2016 for $1.2 billion. Kohlberg Kravis Roberts & Co carries a Standard & Poor’s “investment-grade” credit rating and has more than $165 billion of assets under management.
Kingsbarn will offer investment interests in the Property in a DST structure, making the interests eligible for an IRC Section 1031 exchange. The DST investment structure provides investors with fractional ownership in higher quality properties than they may be able to acquire on their own. DSTs are also very useful in helping investors diversify their real estate portfolios in a much easier fashion than if they tried to acquire multiple properties on their own. The DST offering will be available through KB Exchange Trust, an affiliate of Kingsbarn, later this summer.
