Anyone have experience with dollar store lease renewals?
I purchased a build to suit dollar store at the beginning of the initial 10 year term of the lease (built in 2012).  It is in a good location for these, extremely close to a Walgreens.  I am local so I would inspect the property regularly and by everything I saw and was told by the manager it was doing very well.  In 2020 the store was remodeled adding more cooler space so everything seemed to be going well.  The company decided to terminate the lease prior to the first option period.  Has anyone had this happen?  I was very surprised by this considering the remodel only a couple of years earlier.  I do not know of any relocation store that was built.  Any thoughts as to why a profitable store would be closed?
[{"id": "ift6099", "text": "Are the demographics in the area changing favorably towards higher income?", "replies": [{"id": "ift6rtw", "text": "Yes, lots of new single family residential in the area.  It's on the edge of the city in a growing area so there is vacant land for subdivision development.", "replies": [{"id": "ift7qso", "text": "Dollar stores tend to locate in rural to semi rural, lower income areas, underserved by grocery stores.", "replies": [], "depth": 3}, {"id": "ift8lss", "text": "Hmm. They possibly be seeing the demographic change and not willing to commit to another long term lease. I could be wrong", "replies": [], "depth": 3}, {"id": "ifulllh", "text": "https://dollarstoreproperties.com/", "replies": [{"id": "ifuviz7", "text": "The fact that there is such a hamfisted sub market for this sort of thing.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ift9fqo", "text": "They got a preferred developer to build them a new unit. You will see it pop up soon", "replies": [], "depth": 1}, {"id": "iftd8nd", "text": "Dollar stores are notorious for bailing on locations and relocating to a brand new store whenever a developer comes along and makes the offer.\n\nDeveloper will build to an 8% return on rent then sell it in a 6% return to a NNN investor then move on to the next one. There are vacant dollar generals all over rural/suburban America; usually just down the street from a brand new one.", "replies": [{"id": "ifuz48i", "text": "Not exactly how it happens but you're right, it does happen.  The rents never go down on a relocation of a store that's built 10 years later.  Costs have gone up so much, that would be nearly impossible.  It typically has to do with square footage or location or both.  I suspect OP has a smaller footprint store and probably not in a prime location in the market.  Just my guess.", "replies": [{"id": "ifv50c0", "text": "Thanks for you insight.  Yes, the only thing I can think of is square footage.  I have some build to suits that are in their second and third renewal period so given the age those rents are really low, approximately half of a new build.  Maybe the added cooler space two years ago did so well they decided to build a larger store.  I would think a new build would be at least 15% more rent though the larger footprint may cover that multiple times.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ifthvtl", "text": "FD?  Doesn\u2019t sound like DG.", "replies": [], "depth": 1}, {"id": "ig6kgor", "text": "Specifically Dollar General is notorious for this. Happens all the time. Crazy to me too.", "replies": [], "depth": 1}, {"id": "iggzhs4", "text": "This is surprising did they do a remodel and was this DG or Dollar Tree? We have both.", "replies": [], "depth": 1}]