Dollar Tree - Tenant Overview


January 26, 2024


Tenant Description

Dollar Tree, founded in 1986 in Virginia, has become a significant player in the discount retail sector. With a unique pricing strategy where most items are priced at one dollar, Dollar Tree operates over 16,000 stores across 48 states and 5 Canadian provinces. These stores include both Dollar Tree and Family Dollar brands, emphasizing the company's extensive market penetration and appeal to cost-conscious consumers.

The business model of Dollar Tree revolves around offering a diverse range of products such as seasonal decor, household items, and groceries, all at the fixed price point of one dollar. This straightforward pricing strategy not only simplifies the shopping experience but also attracts a broad customer base, thereby strengthening Dollar Tree's market position.

Dollar Tree's growth strategy is a blend of organic growth and strategic acquisitions, with the acquisition of Family Dollar in 2015 being a pivotal moment. This acquisition, which created a combined organization with sales exceeding $19 billion annually, significantly expanded Dollar Tree's reach and scale. The combined company now operates more than 13,600 stores across 48 states and five Canadian provinces, serving a broader range of customers with both fixed- and multi-price point offerings. This expansion and renovation of existing stores underscore Dollar Tree's ongoing commitment to growth and market adaptability.

In terms of real estate, Dollar Tree focuses on locations that are easily accessible and visible, such as strip malls or standalone locations. This strategic choice ensures convenience for customers, making Dollar Tree a regular destination for everyday shopping needs.

Financially, Dollar Tree has demonstrated resilience and adaptability, particularly in challenging economic environments. The company's consistent performance, underpinned by an effective business model and strategic expansion plans, positions it as an attractive tenant in the commercial real estate market. The acquisition of Family Dollar has not only expanded Dollar Tree's footprint but also enhanced its financial performance and growth prospects. The company expects to generate significant efficiencies and synergies from this integration, further solidifying its position as a compelling option for real estate investors and landlords.

Overall, Dollar Tree's commitment to value and convenience, combined with its strategic growth and robust financial health, make it a notable tenant in the retail landscape. Its ability to adapt to market changes and its continued expansion present a mix of potential risks and opportunities for investors and landlords in the commercial real estate sector.

Average Asking Cap Rate


3 mo avg (399 properties)

Typical Investment/Lease

Average Sale Price




$/Square Foot

$120 - $230

Building SF

9,500 - 11,400

Approx. Store Count


Lease Term

10 Years



Stock Symbol


Credit Quality



Average Asking Cap Rate Trend





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