Deal Overview 

Recession Proof, Pandemic Proof, High Interest Rate Proof, High Cash Flow.

Georgia Gas Station and C-Store is your one-stop destination for all your fuel and convenience needs in the heart of Georgia. Our modern, clean, and well-maintained gas station offers a wide range of high-quality fuels, including unleaded, diesel, and premium options, ensuring your vehicle runs smoothly. But we're more than just a gas station – our spacious convenience store is stocked with an array of snacks, beverages, groceries, and everyday essentials. From hot and fresh coffee to a selection of delicious grab-and-go meals, we've got you covered. Our friendly staff is committed to providing excellent service 24/7, making us the preferred choice for travelers and locals alike. Whether you're filling up your tank or satisfying your cravings, Georgia Gas Station and C-Store is your trusted partner on the road. 

Target Case

NOI 100% index to Budget
Exit Cap Rate 7%
Refinance 70% LTV

Exit Year NOI

$7.9M

IRR

17.1%

Equity Multiple

1.93x

Cash-on-Cash*

13.2%

Prime Location

Selecting a prime location for a gas station in Georgia involves considering several key factors:

Remember that the success of a gas station often depends on factors beyond location alone, including pricing strategies, customer service, and marketing efforts. Conduct a thorough feasibility study to ensure your chosen location aligns with your business plan and objectives.

Plan for Optimal Returns

Achieving optimal returns in any investment or business venture requires a well-thought-out plan and careful execution. Here's a general plan to help you work toward optimal returns:

Optimal returns can vary significantly depending on individual circumstances and market conditions. There is no one-size-fits-all approach, so tailor your plan to your specific goals and risk tolerance. Remember that achieving optimal returns typically involves a long-term perspective and a commitment to sound financial principles.

Big Brand, Quality Asset

International brands, top-quality assets, and strategic locations are pivotal for gas stations in Georgia. Partnering with renowned fuel brands enhances consumer trust and attracts a broad customer base, often entailing favorable supply agreements. Investing in top-quality infrastructure and amenities, including modern pumps, clean facilities, and well-stocked convenience stores, elevates the customer experience, fosters loyalty, and increases revenue streams. Vantage locations, ideally situated near highways, high-traffic areas, or growing communities, ensure consistent patronage and revenue growth. Such assets position gas stations as reliable, competitive, and profitable players in Georgia's dynamic fuel and convenience retail market. 

Local Infrastructure

Local infrastructure is a critical consideration when planning the location of a gas station. Here are key aspects of local infrastructure to assess:

Conducting a thorough assessment of the local infrastructure is essential for selecting an ideal gas station location. Collaborate with local authorities, engineers, and experts as needed to ensure your station is compliant with all infrastructure-related requirements and offers a safe and convenient experience for customers.

In Place Cash Flow

In the gas station business, inplace cash flow specifically pertains to the net cash generated from the station's daily operations, such as fuel sales and convenience store profits, minus operating expenses like fuel procurement, staff wages, utilities, and maintenance costs. It reflects the immediate financial health of the gas station, excluding financing, taxes, or other non-operational factors. 

Prime Location and Economic Growth

A prime location for a gas station is intrinsically linked to economic growth. A strategically positioned gas station, ideally near major highways, busy intersections, or burgeoning commercial areas, can benefit from increased customer traffic. As an area experiences economic growth, it often attracts more commuters, travelers, and businesses, further driving demand for fuel and convenience services. This symbiotic relationship can boost a gas station's profitability, making it a lucrative investment. Therefore, selecting a prime location in a region marked by economic growth potential is essential for long-term success in the gas station business, ensuring sustained customer demand and profitability. 

High Barriers to Entry

Gas station businesses typically face high barriers to entry. Firstly, substantial capital is required to purchase or lease land, install fuel storage tanks, and construct the station. Compliance with strict safety, environmental, and zoning regulations adds complexity and cost. Securing reliable fuel supply agreements with major distributors can also be challenging for newcomers. Furthermore, established competitors often benefit from economies of scale and brand recognition, making it hard for newcomers to compete on price. Finally, the industry's relatively low profit margins mean that even minor errors in business operations can lead to financial losses, increasing the risk for new entrants. 

Local Presence and Track Record

Local presence and a strong track record are crucial in the gas station business. Building a local presence through community engagement and customer trust can drive consistent patronage. A gas station with a positive track record, including reliable fuel quality, fair pricing, and excellent service, fosters customer loyalty and attracts repeat business. Additionally, a solid track record can make it easier to secure financing, negotiate favorable fuel supply contracts, and navigate local regulations. Reputation and reliability play a significant role in ensuring the long-term success and profitability of a gas station in any community. 

Operational Efficiency and Upside

Achieving operational efficiency is paramount for a gas station with a 40% margin. Streamlining daily operations, optimizing staffing, and managing inventory effectively can help maintain profitability. Upside potential lies in diversification—expanding the convenience store offerings, adding car wash facilities, or embracing alternative fuels like electric charging stations. Marketing strategies to attract more customers, loyalty programs, and competitive pricing can further boost revenue. Continual investment in maintenance and equipment upgrades ensures reliability. Strong management, cost control, and a focus on customer experience are key to sustaining and potentially increasing the 40% margin, even in a competitive market. 

Expected Growth in Revenues

For a gas station with a 40% margin, year-on-year revenue can vary widely depending on factors like location, competition, and economic conditions. Assuming a stable and successful operation, if the gas station generates $1 million in revenue in the first year, it would result in a gross profit of $400,000 (40% margin). However, projecting exact revenue growth year-to-year is challenging, as it depends on market dynamics and strategic initiatives. To sustain and potentially increase revenue, strategies like expanding services, marketing, and optimizing operations would be essential, but specific year-on-year revenue growth rates can't be determined without more context. 

Value Add Property Improvement Plan

A property improvement plan (PIP) for a gas station outlines necessary upgrades and renovations to enhance its overall quality, safety, and compliance with brand standards. It typically includes tasks such as modernizing fuel dispensers, renovating the convenience store, improving lighting, upgrading signage, and enhancing landscaping. The PIP aims to create a more attractive and efficient environment for customers, ensuring compliance with franchisor requirements and local regulations. By investing in a PIP, gas station owners can not only maintain brand integrity but also potentially boost customer satisfaction, attract more business, and increase the property's long-term value and profitability. 

Discount to Replacement Cost

A discount to replacement cost in the context of a gas station refers to the difference between the actual market value of the station and the cost it would take to rebuild or replace it with a similar facility. This discount can occur due to factors like depreciation, changes in market conditions, or the station's condition. Investors often seek properties with a discount to replacement cost as it represents a potential cost-saving opportunity. However, it's crucial to assess the reasons behind the discount, as it may indicate maintenance issues, environmental concerns, or unfavorable market conditions that can affect the investment's viability. 

Investment Underwriting

Base Case underwriting projects a levered IRR of 17.1% and an Equity Multiple of 1.93x. Cash distributions are projected to average 13.2% annually during the 5-year hold period commencing June 2023. FYBN’s underwriting includes a $8.725M renovation to complete a change of ownership property improvement plan as part of the Hilton franchise agreement as well as a projected refinance in Year 3 and projected sale in Year 5. 

With the Hotel exceeding $5M in NOI in 2019, FYBN ’s 2023 budget is on par with 2019, unadjusted for inflation, highlighting the below-market flowthrough performance of Hilton as the previous operator of the Hotel. 

FYBN ’s Base Caseunderwriting assumes the asset will, after a guest-facing renovation in Year 2, deliver not only incremental top-line revenue growth but also stronger flow through, yielding a higher NOI margin.


Downside Case

NOI 90% index to Budget

Exit Cap Rate 7.5%

Refinance 65% LTV

Exit Year NOI

$7.1M

IRR

9.4%

Equity Multiple

1.49x

Cash-on-Cash*

7.8%

Target Case

NOI 100% index to Budget
Exit Cap Rate 7%
Refinance 70% LTV

Exit Year NOI

$7.9M

IRR

17.1%

Equity Multiple

1.93x

Cash-on-Cash*

13.2%


Upside Case


NOI 110% index to Budget
Exit Cap Rate 6.5%
Refinance 75% LTV

Exit Year NOI

$8.7M

IRR

22.6%

Equity Multiple

2.24x

Cash-on-Cash*

18.7%

Sensitivity Rationale

Should the GEORGIA  market not grow as expected by 2028, capital markets have not normalized, and bid-ask spreads persist, the Downside Case scenario assumes an NOI index of 90% to Base Case for all five years of the hold period, higher exit capitalization rate (50bps), and lower LTV refinance by 5% in Year 31,  the investment would be projected to yield an IRR of 9.4%, Equity Multiple of 1.49x1, and Average Cash-on-Cash of 7.8%1. To be clear, this scenario assumes downward pressure on all three levers that fuel returns.

Finally, the Upside Case is what FYBN believes to be an achievable scenario in which FYBN executes on planned asset management functions from operations, revenue management, renovation execution, capital planning strategy (i.e., refinance), and best-in-class disposition marketing (e.g., reversionary cap rate compression). The return metrics based on this scenario are projected to be an IRR of 22.6%, Equity Multiple of 2.24x, and Average Cash-on-Cash Return of 18.7%.

Legal Disclaimer

This website is not an offer to sell or the solicitation of an offer to purchase securities. All information available in this website is general in nature, not directed to any particular person, and is for informational purposes only. This website excludes material information, including, but not limited to, risk factors to be considered by prospective investors. The information contained herein reflects the opinions and projections of FYBN Acquisitions Partners, LP (“FYBN”) as of the date of this website, which are subject to change without notice at any time. There is no obligation to update, modify, or amend the information herein or otherwise notify a recipient of these materials in the event that any information contained herein, or any opinion, projection, forecast, or estimate, changes or subsequently becomes inaccurate. The information provided herein is believed to be reliable and has been obtained from sources FYBN believes are reliable, but no representation or warranty is made, express or implied, with respect to the fairness, correctness, accuracy, reasonableness, or completeness of the information and opinions. Neither FYBN nor any of its affiliates, representatives, or executives represents that the information contained in this website is accurate, current, or complete. FYBN does not represent that any opinion or projection will be realized. For the avoidance of doubt, no investment advice is being provided through this website by FYBN or any of its affiliates (including FYBN Advisors, LLC), representatives, or executives. Each recipient of this website should make such investigation as it deems necessary to arrive at an independent evaluation of the contents hereof and should consult its own legal, financial, and accounting advisors to determine the merits and risks of such an investment.

1 In reviewing these projections and projections set forth elsewhere herein, prospective investors are cautioned that no assurance can be given that actual returns will meet or exceed the targeted returns (including that they may be materially lower than the targeted returns) or that actual results will otherwise meet FYBN’s expectations or objectives. In addition, notwithstanding the targeted hold period, FYBN is not required to sell the Gas Station or any portion thereof at any time and the decision of whether and when to sell the Gas Station or any portion thereof will be made by FYBN, in its sole discretion, based on market conditions, the performance of the Gas Station and other factors which it may consider. Accordingly, the Gas Station may be sold, in whole or in part, sooner than expected, or the Gas Station or any portion thereof may be held for longer than the target hold period. Please refer to the offering materials relating to an investment in the Gas Station, including the “Legal Disclosures” set forth therein, for additional material information

*The average cash-on-cash return includes proceeds from an anticipated refinancing but not reversionary value at exit.