Les Schwab Tire Center

In late 2023, my real estate team and I spent time on the ground in Bismarck as part of a North Dakota tour, focusing heavily on the north side of town. That’s where the growth is. That’s where the rooftops are going. And most importantly, that’s where Costco is located, which made it the obvious target for a new Les Schwab Tires store.

​

We looked at a number of sites in that trade area. The problem was that almost all of them had tire restrictions. Dead on arrival.

​

After working through those options, we came across a site at 57th & State that checked the boxes. Even more interesting, it was actually on the market. That’s not typical for me. Most of my deals are sourced off-market through direct outreach, but in this case, the opportunity was already in play.

​

Naturally, the corner was the ideal location, but pricing on the corner and even one pad off the corner was aggressive.

Fortunately, Les Schwab was flexible and open to the southernmost pad on the site, which had better economics.

​

But that’s where things got interesting.

​

The parcel had an odd configuration due to an access drive along the west side. On paper, it increased the overall square footage. In reality, a portion of that land wasn’t usable. So now we had a problem.

​

We were effectively paying for dirt we couldn’t use, which pushed the land cost up and, in turn, drove rents into a range that didn’t pencil for the tenant. At the same time, the seller had his own challenge. He wanted our deal, but he also didn’t want to create a comp that would undercut the pricing he was targeting for the remaining pads. Fair concern.

​

I walked him through the issue. The shape of our parcel was unique. The inefficiency wasn’t present on the other pads. Apples to oranges. To his credit, he leaned in and worked with us. But the real move came from Les Schwab. They went back to the drawing board and tightened up the site plan, trimming the parcel size wherever possible to offset the inefficiencies and bring the economics back in line.

 

The result? A 12,465 square foot building on roughly 1.2 acres. For context, we typically need closer to 1.75 acres for that prototype. Not typical. Not easy. But it worked. Today, the store is open and operating, right where it needed to be.