Dollar General NNN Cap Rates in San Antonio, TX: What Investors Are Paying Now

Market Context: San Antonio’s Net Lease Dominance The San Antonio-New Braunfels MSA has emerged as a premier destination for private equity and 1031 exchange capital seeking recession-resilient yield. While the broader national retail landscape has faced headwinds from rising interest rates, Dollar General (DG) remains the top-tier credit tenant for investors targeting the sub-$2M price bracket. In San Antonio, the intersection of population growth and favorable tax policy has kept cap rates lower than in comparable Midwestern or Rust Belt markets. Institutional and high-net-worth investors view Dollar General as a 'flight to quality' play. As of mid-2026, the demand for these assets in Central Texas is driven by the tenant's investment-grade rating (S&P: BBB) and the absolute NNN lease structure, which eliminates all landlord responsibilities, including roof, structure, and parking lot maintenance. The Anatomy of Dollar General Cap Rates in San Antonio Cap rates for Dollar General properties are not uniform across the San Antonio metro. Pricing is bifurcated based on lease type (NNN vs. NN), remaining lease term, and site specific macro-demographics. Within the Bexar County area, investors are currently observing a spread of approximately 50-75 basis points based on the following factors: 1. Lease Duration and Re-Leasing Risk New construction assets featuring a fresh 15-year primary term represent the most aggressive pricing in the market. These typically trade between 6.80% and 7.10%. Conversely, older 'Legacy' DG stores—often smaller footprints with double-net (NN) structures where the landlord retains roof and structure responsibility—frequently trade at 7.50% or higher, reflecting the increased operational risk and shorter remaining terms. 2. Location and Infill vs. Rural San Antonio is unique in its blend of dense urban infill and sprawling rural outskirts. DG stores located on major arteries like Loop 1604 or Highway 281 demand lower cap rates due to the underlying real estate value. Rural sites in neighboring counties like Atascosa or Wilson offer higher yields but may experience slower appreciation. San Antonio Pricing Tiers for Dollar General Assets | Facility Type | Lease Structure | Typical Cap Rate Range | Avg. Price Point | | :--- | :--- | :--- | :--- | | New Prototype (10,600+ SF) | Absolute NNN | 6.80% - 7.05% | $1.7M - $2.4M | | Standard Prototype (9,100 SF) | Absolute NNN | 7.00% - 7.25% | $1.4M - $1.8M | | Older Relocations/Takeovers | NN (Modified) | 7.50% - 8.25% | $800k - $1.2M | The 'Texas Premium' and 1031 Exchange Velocity Texas is a non-disclosure state with no state income tax, which significantly enhances the after-tax internal rate of return (IRR) for investors compared to states like California or New York. This 'Texas Premium' often results in cap rate compression of 15-25 basis points below the national average for DG assets. 1031 exchange investors are the primary drivers of this market. Faced with strict 45-day identification periods, many buyers prioritize the simplicity of a Dollar General lease over the complexity of multi-tenant shopping centers. The San Antonio MSA provides a sufficient 'basis-point spread' over the 10-Year Treasury to make these acquisitions accretive, even in a higher-rate environment. Credit Strength and Lease Coverage Ratios Dollar General's dominance in the San Antonio market is supported by the store’s unique ability to thrive in disparate economic conditions. When analyzing a specific site, investors should look at the Store Sales to Rent ratio (lease coverage). While DG typically does not disclose store-level sales to the public, neighborhood demographics in San Antonio—specifically areas with household incomes between $45,000 and $75,000—correlate highly with top-performing locations. Asset Selection Criteria for San Antonio Investors * Traffic Counts: Minimum of 10,000 Vehicles Per Day (VPD) on the primary frontage. * Growth Corridors: Proximity to newly permit…