Commercial Real Estate News / Buying / Guide to Buying Truck Stops for Sale

Guide to Buying Truck Stops for Sale

Published: 10-13-23 Category: Buying

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

Trucking is one of the biggest industries in the US, generating nearly $900 billion in revenue every year. Tons of commercial services have popped up to complement the larger trucking industry. One of the most important? The humble truck stop.

Truck stops originally started as small establishments for conveniently fueling trucks on the road and have since evolved into full-service centers for truckers to refuel, relax, and rest.

Suffice it to say, the market for owning and operating truck stops has grown substantially. Here, we'll cover what investors need to know when buying truck stops for sale. We'll discuss the state of the truck stop industry, truck stop real estate, and truck stop profitability.

Let's get started.

What Are Truck Stops Used For?

Truck stops are large gas stations that specifically service short- and long-haul truck drivers. Truck stops sell fuel and other goods while offering showers and break facilities for truckers on the road.

Most truck stops also sell food, drinks, and other common convenience store merchandise, like cigarettes, small electronics, and alcohol.

Some truck stops offer other services for drivers, such as car and truck washes, sit-down dining options, and truck repair. Similar to smaller gas stations, truck stops are a type of special-purpose real estate, meaning the real estate was built for a specific purpose that's difficult to alter.

How Big Is the Truck Stop Industry?

There are about 130,000 C-store and truck stop establishments in the US that collectively generate about $400 billion in revenue a year. About 60% of these stores are single-store independent operations. Revenue generation in the truck stop industry is lop-sided, with the top 50 truck stops generating more than 40% of total annual industry revenues.

Truck stop activity is directly tied to activity in the trucking industry. After experiencing a slowdown during the pandemic, the trucking industry is rebounding, with nearly 140,000 new trucker jobs added in 2022.

Truck stops also service casual drivers as well, and an increasing number of drivers on the road means more drivers stopping at truck stops.

Buying a Truck Stop for Sale

Location is the key consideration with truck stops. Generally, truck stops are located outside of urban areas at high-traffic interstates that see frequent commercial use. Buying commercial property closer to major thoroughfares will be more expensive but will likely draw much more business.

The best financing option for your truck stop will likely be an SBA 7(a) loan. 7(a) loans provide up to $5 million to purchase, construct, or renovate real estate. SBA loans may also offer lower interest rates than conventional property loans.

Truck Stop Costs & Overhead

Truck stop costs vary depending on what the real estate features: For instance, a smaller truck stop with a single bay will cost a lot less than a truck stop with a convenience store attachment that sells related services. If you set out to buy a larger truck stop complete with a convenience store and other amenities, expect to pay at least $1 million.

Smaller single-bay truck stops can cost as low as $200,000, and full-sized, multi-bay truck stops with store and dining options will likely cost over $2 million.

Management and upkeep costs for a truck stop are split between:

Payroll;
Inventory (e.g., fuel, food, beverages, etc.);
Equipment depreciation (e.g., pumps, truck washes, etc.);
Utilities; and
Insurance.

No doubt about it, it's a lot to take in. But your search for truck stops for sale will be a lot less stressful if you work with a convenience store broker on your investment team. Convenience store brokers are commercial real estate brokers who specialize in C-stores, truck stops, gas stations, and related properties.

C-store brokers are familiar with their industry and understand what a financially healthy commercial property looks like. They'll be able to assist you in finding the right commercial real estate investments and handle contract negotiations when it's time to buy.

How Profitable Is the Average Truck Stop?

It's hard to find specific data on truck stop profitability, but the average convenience store turns a profit margin between 5% and 7%. Perhaps surprisingly, most truck stops and gas stations make very little money from fuel sales—meaning that non-fuel sales and services have the highest profit margins. Beverages and snacks have the highest margins, between 40% and 50%.

A major risk to truck stop profitability is the possibility of highway rerouting: If a new highway is built, it could redirect traffic away from your stop, drastically decreasing stop revenue and activity.

As such, doing your due diligence by researching future highway construction plans and nearby competitors is crucial when buying truck stops for sale. Additionally, truck stop revenues can suffer whenever fewer people are driving.

What State Makes the Most on Trucking?

The state that generates the most revenue from trucking is Texas. The Texas trucking industry generates more than $90 billion in revenue per year and more than $60 billion in labor income.

Texas also has the most truckers per state at 172,000. About 1% of all Texas jobs are trucking jobs.

What Are the Biggest Truck Stops in the US?

The largest truck stop chain in the US is Pilot Flying J, which owns over 750 truck stops across North America. Flying J locations usually have some kind of sit-down restaurant (mostly Denny's), while Pilot locations have a more convenience-oriented feel. Pilot Flying J locations generated more than $21 billion in 2022.

The largest truck stop in the US in terms of total size is the famous Iowa 80 outside of Walcott, IA. Iowa 80 has over 900 parking spots and serves over 5,000 customers each day. The Iowa 80 complex contains multiple stores, restaurants, a truck wash, and even a movie theater.

Is Buying a Truck Stop for Sale a Good Idea?

Yes, buying a truck stop for sale can be an excellent idea. Although margins on fuel sales are low, C-store product margins are high, and the US has a very high number of drivers, so you can count on revenue from casual drivers as well.

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