Floor & Decor

Tenant Overview – Floor & Decor Holdings, Inc.

Floor & Decor (NYSE: FND) is a leading specialty retailer of hard-surface flooring and related accessories. The company has grown from a regional player into a national powerhouse through its large-format warehouse store model and focus on in-stock inventory and value pricing. Founded in 2000 and headquartered in Atlanta, Floor & Decor operates more than 220 warehouse stores across the United States, each serving as a regional one-stop shop for flooring, tile, wood, stone, and installation materials.

Company highlights:

• Publicly traded under ticker symbol FND
• Fortune 1000 status with over $5 billion in annual revenue
• More than 220 warehouse-format locations and growing
• Double-digit year-over-year store growth
• Investment-grade corporate metrics
• Store model supports DIY and Pro customer base
• Strong e-commerce integration and in-store pickup service
• High in-store productivity and average unit volumes exceeding $20M annually

Floor & Decor’s store model is built around delivering a superior customer experience through large-scale inventory, immediate product availability, and specialized services such as on-site design consultation and professional account management. Its high repeat-visit rate and deep Pro relationships contribute to sustained foot traffic and strong store-level economics.

Lease Overview – Net Lease with Corporate Guarantee

The subject property features a long-term net lease directly with Floor & Decor Holdings, Inc. The tenant is responsible for all operating expenses, taxes, insurance, and CAM. Landlord responsibilities are typically limited to roof and structural elements, or in some cases entirely eliminated in a triple-net lease scenario.

Lease characteristics:

• Initial term typically ranges from 10 to 20 years
• Multiple 5-year renewal options with scheduled rent increases
• Corporate guarantee from Floor & Decor Holdings, Inc.
• Rent escalations provide hedge against inflation
• Landlord has no involvement in operations or property-level decisions
• Strong tenant capital investment in site infrastructure
• Long average store tenure, with low historical closure rates

The lease structure provides stable, long-term income and a low-maintenance ownership profile, making it highly attractive for investors seeking predictable returns and minimal involvement.

Market Fundamentals – High-Growth Southeastern Metro

The property is located within a growing Southeastern metropolitan area benefiting from a favorable combination of job growth, domestic migration, and affordable cost of living. These attributes support sustained homeownership, retail demand, and construction activity—all of which drive foot traffic and sales at Floor & Decor stores.

Demographic and economic drivers typically include:

• Regional population ranging from 750,000 to 1 million+
• Strong homeownership rates (60–70%)
• Median household income between $70,000–$90,000
• Growth in new construction, residential renovation, and remodeling activity
• No state income tax (in many Southern states)
• Favorable business climate attracting employers and workforce migration
• Top-tier hospitals, universities, and infrastructure assets
• High livability scores and low unemployment

These metro areas are strategic for retailers like Floor & Decor that rely on large trade areas, access to contractors, and growing housing stock. Market selection is a critical component of Floor & Decor’s real estate strategy, with each new location carefully chosen based on sales potential and market coverage.

Submarket Characteristics – Strong Trade Area and Regional Retail Corridor

The property is positioned within a well-established commercial corridor featuring a mix of national retail tenants, grocery anchors, QSR operators, and automotive users. These corridors typically serve as retail destinations drawing customers from a 10- to 20-mile radius. Floor & Decor’s location benefits from high daily traffic counts, strong visibility, and immediate access to interstate and regional arterial roads.

Submarket attributes:

• Trade area population exceeding 250,000
• Average daily vehicle counts over 35,000 on adjacent roadways
• Nearby tenants include Home Depot, Lowe’s, Target, Walmart, Costco, Publix, and major regional banks
• Commercial synergy drives cross-shopping and traffic consistency
• Contractor-oriented area with easy truck access and bulk loading
• Residential density supports walk-in and professional customer base
• Ample parking, lighting, and signage visibility for destination retail

These trade areas are designed to accommodate both high-volume stores and frequent visits from contractors, which is key to Floor & Decor’s operational success and repeat customer retention.

Property Features – Floor & Decor Warehouse Store Format

Floor & Decor properties are typically built or retrofitted to a standardized, high-efficiency layout that supports warehouse merchandising, material handling, and customer convenience. Each store is designed to accommodate large quantities of flooring material, installation accessories, and customer staging areas.

Typical site features:

• 75,000 to 90,000 square feet of GLA
• Warehouse racking system for vertical product storage
• Customer service and Pro counter
• In-house design center and sample area
• Loading docks and staging area for large-item pickup
• Heavy floor load capacity and clear heights of 20’+
• Ample paved parking with 200+ spaces
• Truck ingress/egress for product deliveries and Pro contractor loading

The format supports efficient product handling, immediate customer fulfillment, and easy merchandising updates. It also contributes to Floor & Decor’s low SG&A cost structure, which fuels profitability and store expansion.

Investment Highlights – Core Net Lease Retail Asset

The Floor & Decor offering provides multiple investment advantages:

• Corporate-backed net lease with investment-grade tenant
• Long-term stability with minimal landlord obligations
• High-quality location in a growing, economically strong metro area
• Proven retailer with low closure risk and national expansion plan
• Structured rent increases enhance income over time
• Strong underlying real estate value in a land-constrained submarket
• Excellent tenant credit profile for financing and estate planning
• Ideal for 1031 exchange, retirement income, or generational wealth transfer

This type of asset offers a compelling mix of security, yield, and appreciation potential rarely found in single-tenant retail. Floor & Decor’s long-term growth trajectory and disciplined real estate model further reduce downside risk.

Conclusion

This Floor & Decor net-leased investment represents a best-in-class opportunity to acquire a nationally recognized, high-performance tenant in a growing Southeastern market. With a strong lease structure, minimal management, and excellent fundamentals, the asset is positioned to deliver reliable, passive income and long-term value.

For investors focused on capital preservation, stable yield, and exposure to essential retail, Floor & Decor stands as a benchmark-quality asset. The company’s continued expansion into Southern and Sunbelt markets ensures strong brand performance and reinforces its position as a market leader. As demand for specialty retail in home improvement continues to grow, this property offers the scale, security, and income profile aligned with high-performing, long-hold real estate portfolios.