Credit Lease Loan Tractor Supply Building

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Credit Lease Loan Tractor Supply Buildings.

Below find a summary of one of several loan products available through Caffrey & Company, LLC for properties supported by a long- term lease from Tractor Supply.  Rates are as of September 16, 2020 for Credit Lease Loan Tractor Supply Building.

National Credit Lease Loan Program Highlights for Tractor Supply Buildings:

  • Loans from $750,000 to $10,000,000 and up
  • Multiple structures offered

Including 10 Year Fixed Rate

  • Typical rates presently ranging from 3.79% to 3.99%
  • Typical amortization: 25 years to 30 years
  • Most require a minimum down payment between 20% and 25% of the purchase.
  • Caffrey Loan Placement fee 1.0%
  • Typical recourse: 20% to 25% Limited
  • Flexible prepayment with extra 10% annual paydown allowed with no premium charged
  • Minimum remaining primary lease term: 7 Years
  • All loans assumable, with only ¼% fee
  • Optional 50-day rate lock available
  • Rate Lock—50 days from CCL acceptance and deposit submission
  • Expedited closing process targets 33—35 days, CCL to potential closing table

Background on Tractor Supply for analysis the credit when buying a tractor supply with 1031 funds:

Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, has been passionate about serving its unique niche, as a one-stop shop for recreational farmers, ranchers and all those who enjoy living the rural lifestyle, for more than 80 years.

Tractor Supply offers an extensive mix of products necessary to care for home, land, pets and animals with a focus on product localization, exclusive brands and legendary customer service that addresses the needs of the Out Here lifestyle. With more than 38,000 Team Members, the Company leverages its physical store assets with digital capabilities to offer customers the convenience of purchasing products they need anytime, anywhere and any way they choose at the everyday low prices they deserve. At June 27, 2020, the Company operated 1,881 Tractor Supply stores in 49 states and an e-commerce website at www.TractorSupply.com.

Tractor Supply Company also owns and operates Petsense, a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of pet products and services. At June 27, 2020, the Company operated 180 Petsense stores in 25 states. For more information on Petsense, visit www.Petsense.com.

Second Quarter 2020 Earnings highlights: https://ir.tractorsupply.com/investor-relations/financials/quarterly-results/default.aspx

Net sales for the second quarter 2020 increased 35.0% to $3.18 billion from $2.35 billion in the second quarter of 2019. Comparable store sales for the second quarter 2020 increased 30.5% driven by comparable transaction count and comparable average ticket of 14.6% and 15.8%, respectively. The COVID-19 pandemic had a significant impact on consumer demand across all of the Company’s major product categories as customers focused on the care of their homes, land and animals. The increase in comparable store sales was driven by unprecedented demand for spring and summer seasonal categories along with exceptional growth in everyday merchandise, including consumable, usable and edible products. All geographic regions of the Company had robust comparable store sales growth. In addition, the Company’s e-commerce sales experienced triple-digit sales growth.

Big jump in Gross Profit:

Gross profit increased 41.0% to $1.16 billion from $820.7 million in the second quarter of 2019, and gross margin increased 155 basis points to 36.4% from 34.9% in the prior year’s second quarter. The increase in gross margin was driven by lower depth and frequency of sales promotions, favorable product mix and lower transportation costs as a percent of net sales.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 33.0% to $709.1 million from $533.2 million in the second quarter of 2019. As a percent of net sales, SG&A expenses decreased 33 basis points to 22.3% from 22.7% in the prior year’s second quarter. The decrease in SG&A as a percent of net sales was primarily attributable to leverage in occupancy and other fixed costs from the increase in comparable store sales. The leverage from these SG&A expenses were partially offset by incremental costs related to the COVID-19 pandemic and increased incentive compensation given the Company’s strong performance in the quarter. The Company incurred incremental costs related to the COVID-19 pandemic of approximately $55 million, including appreciation wages for frontline Team Members as well as additional labor hours and supply costs dedicated to cleaning and sanitation as COVID-19 cases increased across the country.

Even larger percentage increase in operating income for the second quarter:

Operating income for the second quarter of 2020 increased 55.7% to $447.8 million compared to $287.6 million in the second quarter of 2019.

The effective income tax rate was 22.9% compared to 22.4% in the prior year’s second quarter.

Net income increased 54.5% to $338.7 million from $219.2 million in the second quarter of 2019, and diluted earnings per share increased 61.1% to $2.90 from $1.80 in the prior year’s second quarter.

During the second quarter of 2020, the Company opened 18 new Tractor Supply stores and three new Petsense stores and closed three Petsense stores.

During the first six months of 2020, the Company opened 38 new Tractor Supply stores and three new Petsense stores and closed one Del’s store and three Petsense stores.

No public credit ratings with the two big rating agencies:

We are not aware of public credit ratings for Tractor Supply issued by Standard and Poors or by Moody’s.  This a great example of a financially strong company that attracts lenders with great financial terms.

Additional commercial real estate loan interest rates:

If the above loan terms are not exactly a perfect fit, checkout additional interest rates on our web site:  Commercial Real Estate Loans Interest Rates.  Call or email Mike Caffrey with any questions and for a free loan quote:  (913) 402-7077 or [email protected]


On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.

Have a question please contact
Mike Caffrey
Telephone: (913) 402-7077
[email protected]
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