Why Are So Many Dollar Stores Being Sold Despite Strong Cap Rates?

[Naresh Yegireddi]

I have been analyzing commercial real estate opportunities involving stores like Dollar General, Dollar Tree, and Family Dollar. From a financial perspective, the numbers look attractive—many of these properties show a Cap Rate of 6%–8% or more, which is quite decent.

For example, if a Dollar Store property is listed at $1.2 million with an average Net Operating Income (NOI) of $90,000 per year, financing 50% with a 6.5% APR, loan would still result in positive cash flow from day one. Over time, the property appreciates, and with a five-year exit strategy, I would not only gain from rental yields but also from appreciation and loan equity buildup. Essentially, this investment appears to double the initial capital over five years.

However, I’ve been noticing an increasing number of these properties being listed for sale. Given that the financials appear solid and these are typically low-maintenance, stable investments, I’m curious—why are so many owners selling them? Is there an underlying risk or trend in the market that I might be overlooking?

Would appreciate insights from anyone with experience in this space!