Four Springs Capital Trust, an internally managed private real estate investment trust, has purchased two automotive service centers that will be placed into a Delaware statutory trust program sponsored by an affiliated company. The purchase prices were not disclosed.
The two properties include a collision repair center located in Bloomington, Minnesota that is leased to an ABRA Auto Body & Glass company, and a AAA Tire & Service Center located in Milford, Ohio.
Four Springs Capital Trust intends, through affiliate DST sponsor Four Springs TEN31 Xchange, to assemble a portfolio comprising the two properties for investors participating in Section 1031 tax deferred real estate exchanges. Four Springs TEN31 Xchange sponsors DST offerings that feature single tenant net-leased real estate assets.
“Automotive service centers are a business sector that is largely immune from disintermediation by the Internet,” said Coby Johnson, president and chief operating officer of Four Springs Capital Trust. “You simply can’t get an oil change or tires replaced online, so we see great value in well-located properties leased on a long-term basis to creditworthy tenants.”
The company cited a McKinsey & Company report indicating that the $267 billion North American auto aftermarket industry is expected to grow at a 1.5 percent annual rate over the next 12 years.
“USA Today has also reported that today’s consumers are keeping their vehicles longer and are more aware of the importance of preventive maintenance and scheduled servicing to maximize the lifetime value of their vehicles,” the company noted. “This rising demand for aftermarket parts and services is spurring new growth and revenue opportunities for a wide range of businesses operating in the automotive aftermarket industry.”
In other company news, Four Springs Capital Trust recently received an investment grade credit rating from Egan-Jones Ratings Company of BBB as a corporate entity, as reported by The DI Wire.
Four Springs Capital Trust focuses on acquiring a portfolio of retail, industrial/warehouse and healthcare properties net leased to investment grade and other creditworthy tenants under long-term leases.