21 Michigan NNN Gas Station & C-Store Properties
GPM Investments / ARKO Corp. (Nasdaq: ARKO) · Triple Net Leases
Regulation D · Rule 506(c) · Accredited Investors Only
21 NNN gas station & convenience store properties leased to GPM Investments, a wholly-owned subsidiary of ARKO Corp. (Nasdaq: ARKO) — the sixth-largest convenience store operator in the United States.
Investment Thesis
This fund combines institutional-grade NNN lease security with exceptional Year 1 tax efficiency — producing after-tax cash-on-cash returns that significantly exceed the pre-tax figures available in most CRE asset classes.
All 21 leases guaranteed by GPM Investments, LLC — a wholly-owned subsidiary of ARKO Corp. (Nasdaq: ARKO). SEC-reporting, publicly traded, 3,500+ locations. Transparent financials available on EDGAR.
True Triple Net (NNN) structure — tenant bears 100% of property taxes, insurance, and maintenance costs. Zero management overhead for investors throughout the hold period.
10% rent bumps every five years on all 21 leases. Built-in inflation protection that is contractually guaranteed, not subject to market negotiation or operator discretion.
Gas station & C-store cost segregation produces 60%+ of depreciable basis into 5-yr and 15-yr property. Under OBBBA 100% bonus depreciation (current law), Year 1 after-tax CoC reaches 48.79% for LP investors at the 41.25% combined rate.
All 21 properties carry positive Pre G&A Cash Flow Coverage (CFC). The six lowest-performing sites from the original 27-property universe were removed. Minimum CFC in the fund: 0.88x (Bldg 2501, Mt. Pleasant).
Rolling disposition at each property's lease renewal date, proceeds exchanged into investment-grade NNN assets (Walgreens, Dollar General, CVS, McDonald's). §1245 and §1250 recapture fully deferred at exit if exchange timelines are met.
Capital Structure
| Capital Stack | Amount |
|---|---|
| Portfolio Purchase Price (8.25% Cap) | $31,329,830 |
| Loan (60% LTV) | $18,797,898 |
| Rate / Amortization | 6.35% / 20 Yr |
| Annual Debt Service | $1,661,964 |
| Down Payment (40%) | $12,531,932 |
| Acquisition Fee (2%) | $626,597 |
| DS Reserve (3 mo) | $415,491 |
| Lender Origination (0.75%) | $140,984 |
| Title Insurance (0.35%) | $109,654 |
| Due Diligence (21 sites) | $194,250 |
| Cost Segregation Study | $25,000 |
| Legal Fees | $50,000 |
| Fund Admin Reserve (Y1) | $75,000 |
| Total Equity Raise | $14,168,908 |
| LP Investor Equity (89.4%) | $12,668,908 |
| Fortis GP Co-Invest (10.6%) | $1,500,000 |
| Annual Cash Flow | Amount |
|---|---|
| Gross NOI (21 NNN Sites) | $2,584,711 |
| Asset Mgmt Fee (2% of NOI) | ($51,694) |
| Net Operating Income | $2,533,017 |
| Annual Debt Service | ($1,661,964) |
| Fund Admin Expenses | ($70,000) |
| Cash Available for Distribution | $801,053 |
| DSCR (Debt Only) | 1.52x |
| DSCR (Incl. Fund Admin) | 1.49x |
| 6% Pref on LP Equity ($12,668,908) | $760,135 |
| Preferred Return — Covered? | YES ✓ |
| Excess Cash Above 6% Pref | $40,918 |
| LP Share of Excess (50%) | $20,459 |
| LP Annual Distribution | $780,594 |
| LP Pre-Tax Cash-on-Cash | 6.16% |
Investor Returns
Pro forma exit at Year 3 at the same 8.25% entry cap rate on contractually-bumped rent (+10%). Weighted-average hold period is 2.9 years based on rent-weighted lease expiration dates.
Exit Waterfall — Y3
Distribution Waterfall
Preferred return base = LP equity only ($12,668,908). Cumulative. GP participates as LP pro-rata on $1.5M co-invest AND takes 20% promote after return of all capital.
Cost Segregation & Tax Analysis
Gas station and C-store assets are among the most cost-segregation-efficient real estate classes — high concentration of 5-year personal property (pumps, tanks, canopy, equipment, signage) and 15-year land improvements (paving, lighting, landscaping). Under 100% bonus depreciation, all short-lived property is written off in Year 1.
Pre-OBBBA reference only
OBBBA signed — this IS current law
⚠ Passive Activity Loss Rules (IRC §469): For most LP investors, these paper losses are passive and may only offset other passive income in the year generated. Unused losses carry forward until the investment is disposed. Investors with Real Estate Professional status (IRC §469(c)(7)) may deduct losses against ordinary income with no limitation. Michigan does NOT conform to federal bonus depreciation — state tax benefits remain limited to Michigan's own depreciation schedule. Consult your tax advisor before investing.
Portfolio — 21 Michigan Properties
All 21 properties carry positive Pre G&A Cash Flow Coverage. The six lowest-performing sites from the original 27-property universe were removed prior to fund formation. Lowest remaining CFC: 0.88x.
| # ↕ | City ↕ | Brand | CFC ↕ | Annual Rent ↕ | Lease Exp ↕ | SF ↕ | Built ↕ | Map |
|---|
CFC = Pre G&A Cash Flow Coverage (store-level profitability multiple). All leases are Triple Net (NNN). Tenant = GPM Investments (subsidiary of ARKO Corp., Nasdaq: ARKO). Ask prices at 8.00% cap rate.
Sponsor & Management
30-year commercial real estate veteran who ran one of the most productive Marcus & Millichap offices in the country. Steve leads the FCS platform, broker recruitment, and institutional infrastructure. Deep relationships across Michigan and national NNN markets spanning three decades.
University of Michigan. Recruited by Marcus & Millichap, co-founded Fortis Net Lease in 2009. $9.3B+ in total sales across 4,000+ transactions. Holds Real Estate Professional status under IRC §469(c)(7), enabling full paper loss deductibility against ordinary income. Co-investing $1,500,000 as GP sponsor — full alignment with LP investors.
University of Michigan Economics (1999–2002). Began at Marcus & Millichap Detroit. Billions in NNN transactions across nearly all 50 states. Institutional client base includes Realty Income, STORE Capital, Spirit Realty, and VEREIT — the defining names in net lease REITs.
Professional Advisors
Tim Lee — Legal Counsel
Honigman LLP, Partner, Corporate Practice. Domestic and cross-border M&A, corporate finance, securities, Reg D/Rule 506(c). J.D. summa cum laude, MSU College of Law. Best Lawyers in America; Super Lawyers Rising Star. Honigman: AmLaw 200 firm, 350+ attorneys, Band 1 Michigan (Chambers USA).
Matthew Bigelow, CPA — Tax Advisor
Tax Principal, Doeren Mayhew, Troy, MI. ~15 years specializing in pass-through entity taxation (partnerships, S-corps), multi-state nexus, cost segregation analysis. Prior Global Mobility Advisor at KPMG. Doeren Mayhew: founded 1932, Top 50 U.S. CPA firm, 6th largest in Michigan.
Key Risk Factors
The following is a summary of material risk factors. This is not an exhaustive list. Prospective investors must carefully review all risk factors in the full Private Placement Memorandum before investing.
Request Materials
Verified accredited investors may request the complete Private Placement Memorandum, Operating Agreement, and Subscription Agreement. All documents subject to NDA and accredited investor verification prior to distribution.
Or contact us directly:
Rob Bender · Fortis Capital Solutions
30445 Northwestern Hwy, Suite 275 · Farmington Hills, MI 48334
fortisnetlease.com