Rio West Shopping Mall / Tractor Supply Anchored Center

Highlights:

• Anchored by the #1 ranked Tractor Supply in the State of New Mexico and #4 ranked nationally
• Tractor Supply just recently exercised their 5-year option extending their lease out till June 2032
• Both Tractor Supply and Castle Furniture have operated at this location for 14 years
• New 10-Year Lease with NAPA Auto Parts
• With 2027 rent increases- yield goes to 9.48% cap rate
• Opportunity to purchase the property at approximately $33 PSF- well below replacement cost
• Average current rent for the three tenants is $4.51 per square foot, exceptional intrinsic value for an investor
• Comparable to fee simple ownership control with approximately 134 years of term
• Only 10% increases every 25 years during the option period- 0.4% annually- Way Below Inflation
• Extremely low ground rent ($0.21 PSF) and extremely low basis provides investor with stable

Description:

New Mexico Broker of Record Lee Langen - RE/MAX (505) 450-6927 License No. 19241
Faris Lee Investments is pleased to present the exclusive opportunity to acquire a top-performing, multi-tenant retail center anchored by Tractor Supply in Gallup, New Mexico. The asset delivers exceptional site-level performance, anchored by the #1-ranked Tractor Supply location in New Mexico and #4 nationwide (Placer.ai). Demonstrating immense commitment to the site, Tractor Supply recently exercised its 5-year renewal option, extending its lease term through June 2032. Both Tractor Supply and Castle Furniture have successfully operated at this location for 14 years, providing long-term tenancy and income stability, while NAPA Auto Parts franchisee recently executed a new 10-year lease. Offered at an attractive 9.00% cap rate ($3.376 million), the investment delivers high initial yield with contractual growth elevating the cap rate to 9.48% in 2027. Priced well below replacement cost at approximately $33 per square foot with an average in-place rent of just $4.51 PSF, the asset offers investors exceptional intrinsic real estate value and downside protection. Furthermore, the property features a 134-year ground leasehold interest, providing control comparable to fee-simple ownership, with minimal ground rent ($0.21 PSF) and highly favorable 10% rent escalations every 25 years (0.4% annually).

The center occupies a dominant position within the Gallup retail hub, directly adjacent to the Rio West Mall (2.53 million annual visitors). The trade area is characterized by top-tier national retailer performance, surrounded by several of the highest-trafficked stores in the country and state according to Placer.ai, including Walmart (#4 nationwide), Harbor Freight (#15 nationwide), Safeway (#1 in NM), Starbucks (#1 in NM), Marshalls (#2 in NM), and McDonald’s (#3 in NM).

Gallup serves as the primary commercial and logistics capital for the Four Corners region, supported by major economic drivers and expanding regional infrastructure. Key industrial and regional catalysts include the 2,500-acre Gallup Energy Logistics Park (featuring 365 acres of BNSF-certified rail), a recent 4,800-acre city annexation designated for millions of square feet of industrial/logistics development, and qualification for $100 million in state logistics funding. Additionally, the area is anchored by the approved $1.58 billion, 571-acre Gallup Navajo Nation Medical Center mixed-use development. Combining high initial yield, extreme discount to replacement cost, and unmatched tenant sales performance, this asset represents a compelling high-yielding investment in a major regional trade hub.

1308 Metro Ave., Gallup, NM 87301

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