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BEVERLY, Mass. — Real estate investment and private equity firm Brookwood Financial Partners LLC has big plans for its affiliate BW Gas & Convenience Holdings LLC following this week's acquisition of a 10-store convenience and gas station portfolio in western Iowa. The company plans to acquire between 600 and 1,000 more sites over the next few years, which would take it from an industry newcomer to a convenience powerhouse.
The affiliate plans to purchase small portfolios similar to the Iowa acquisition, which is BW Gas & Convenience's first and includes eight company-owned and -operated stores, two company-owned and dealer-operated stores, and a Cenex-branded fuel distribution and transportation business.
"We recognize it's ambitious," Tom Trkla, founder, CEO and chairman of Brookwood, told CSNews Online. However, the company has spent the last year and a half examining the marketplace, establishing contacts and preparing to expedite acquisitions while staying aware of the industry's challenges. It even set up a large database of gas station locations and owners. "We have the infrastructure in place."
Brookwood's strategy for achieving its growth goal revolves around leveraging its 23-year history of acquiring real estate and adding value.
Its focus on small portfolios is due to the pressure that single-store operators and retailers who own a small number of c-stores currently face due to the Affordable Care Act, the implementation of EMV chip cards, and other regulations.
Brookwood can offer professional guidance, oversight, and additions or improvements that add value to a site, company officials noted. As a result, BW Gas & Convenience is looking at older c-stores with footprints ranging from 1,500 to 2,500 square feet, to which it can add value. Brand-new stores that have less to improve tend to operate in more urban environments, so Brookwood is concentrating on suburban and rural markets.
"This [western Iowa] portfolio hits on all those metrics," said Brian Trout, senior vice president of operations. In particular, the Cenex fuel distribution and transportation business added to its appeal as "we felt that being branded was one of the best ways to enter the market."
Brookwood and BW Gas & Convenience are starting out in the Midwest due to the low cost of living and low cost to enter the market, as well as the growth of population and demand in some of the metro markets here.
"It is a business-friendly environment from a regulatory perspective," Trkla added.
The Midwest will not remain its only area of focus, though. The company plans to build up and out from regional portfolios in different parts of the United States. It is currently performing due diligence on potential purchases "in the hundreds," according to the chief executive.