Susser Continues Sale-Leaseback Strategy

CORPUS CHRISTI, Texas -- Susser Holdings Corp. and its wholesale fuel distribution spinoff Susser Petroleum Partners LP opened three new Stripes convenience stores in Texas this month, continuing their joint real estate partnership.

Sale-leaseback transactions worth $15.2 million were completed for the three stores. These latest Stripes stores sold by Susser Holdings to Susser Petroleum Partners -- a master limited partnership (MLP) created in September -- brings the number of sale-leaseback transactions completed between the companies to 14 in just six months.

Among the three new stores is a large-format highway store with a truck diesel facility, and another location with a tunnel car wash and lube center, according to the announcement.

At the end of last year, Susser Holdings Chairman and CEO Sam L. Susser said the real estate partnership between the two companies was "off to a great start.” At that time, he said eight stores had been "dropped down" to the MLP, and it was expected that Susser Petroleum Partners would complete the acquisition of seven additional Stripes stores by this April.

Corpus Christi, Texas-based Susser Holdings operates more than 560 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner. The parent company is also the majority owner and general partner of Susser Petroleum Partners, which distributes more than 1.4 billion gallons of motor fuel annually to Stripes stores, independently operated locations and other commercial customers.

In recent years, sale-leasebacks have been gaining popularity in the convenience store industry. Under this type of financing, a company sells one or more of its single tenant owner-occupied properties to a third-party investor, usually for fair market value. The investor provides the seller with a triple-net operating lease for a period of 10 to 25 years, plus options so that the seller can continue to occupy the property. Initially, the seller/tenant usually pays the investor a negotiated annual rent equal to 8 percent to 12 percent of the contracted sale price.