Extended Real Estate Pact Will Boost GPM’s M&A Power

The Arko Corp. subsidiary adds one year to its agreement with Oak Street Real Estate Capital

IT LOOKS LIKE GPM Investments LLC’s growth streak is going to continue.

The wholly owned subsidiary of Arko Corp. extended its existing $1-billion agreement with Chicago-based real estate investment firm Oak Street Real Estate Capital, a division of Blue Owl Capital, by one year. The extended agreement provides aggregate availability in the amount of $1.15 billion during the second year of the term.

The two companies originally signed a one-year agreement in May 2021, in which Oak Street agreed to purchase and lease real estate to Richmond, Va.-based GPM or its affiliates. Under the agreement, Oak Street purchases and leases to Arko the underlying real estate associated with acquisitions of convenience stores and gas stations, while Arko owns and operates the related acquired businesses.

To date, Oak Street has purchased $253 million of real estate under the initial agreement. Another $130 million of real estate is expected to be purchased through GPM’s recently announced acquisition of the fleet fueling card lock and distribution assets of Quarles Petroleum Inc.

This partnership boosts Arko’s and GPM’s financial flexibility and purchasing power and, as a result, allows GPM to be more aggressive with its M&A strategy.

“Working with Oak Street has given us significant dealmaking flexibility,” said Arie Kotler, president and CEO of Arko. “We plan to continue our highly successful acquisition model with even more creative solutions for sellers, who we believe recognize that we are an acquirer of choice because of our proven strategy of preserving strong local brands while closing deals at highly attractive multiples.”

GPM has made 20 acquisitions since 2011. Its planned purchase of Quarles Petroleum is expected to close in the second quarter of this year.