Yesway on Track to Acquire 100 Stores by Year’s End
BEVERLY, Mass. — Atypical of traditional real estate private-equity firms, Brookwood, which is saying a big “yes” to the convenience store industry with its new Yesway brand, has no intentions of simply fixing up distressed assets only to sell them for a nice profit a few years down the road.
“We like the convenience store business a great deal. We spent years studying its trends and economics. Our goal is to build a world-class company,” Chairman and CEO Thomas Nicholas Trkla told Convenience Store News, whose editors recently traveled to Brookwood’s Beverly headquarters, as well as Yesway’s new base in West Des Moines, Iowa.
Brookwood, parent of the BW Gas & Convenience Holdings LLC retail division, had 31 Iowa convenience stores at the time of CSNews’ visit in early August, with five recently acquired locations being rebranded and reopened as Yesway stores that week. The company was under contract to acquire an additional 14 stores in another state shortly following the visit. Still, that is just the tip of the iceberg.
“Given our current pipeline, I feel confident that we can acquire 100 stores by the end this year,” said Trkla, who founded the firm in 1993. “And I expect to own between 600 and 1,000 stores in three or four years, which will make us a strong player in the industry.”
Brookwood’s decision to move into the c-store space was the result of years of research to determine in what new industries the firm should invest. Mark J. Daniels, managing director and chief strategic officer, was charged with unearthing operating businesses that would benefit from and be a direct extension of Brookwood’s years of real estate and operating experience.
Over a roughly three-year period, Daniels, working closely with Trkla, investigated more than 300 operating businesses in numerous industries. Two and a half years ago, the firm decided it would go full steam ahead on c-stores, a “recession-resistant retail industry,” Daniels recalled.
While Brookwood could have simply set out to acquire c-stores in close proximity to its New England headquarters, the decision to acquire stores in the Midwest is deliberate.
“Our decision to enter the c-store business is a direct and deliberate extension of our historical value-add real estate investment strategy. We plan to utilize our real estate expertise to create value by renovating and repositioning the stores we acquire, improving the merchandizing mix and streamlining operations. As such, we are not targeting higher priced c-stores in urban locations, but rather c-stores in more suburban and rural locations,” Trkla revealed.
“We view each and every c-store acquisition through the lens of a real estate operator to determine how we can improve the physical real estate to provide a better, markedly improved product in the marketplaces we serve,” he continued.
Regarding the Midwest stores the division has already acquired, Trkla acknowledged some of the locations need tender, loving care. He is excited to improve these stores and transform them into something members of the local communities will truly love.
Look in the September issue of Convenience Store News for much more on Yesway’s plans.