Acquisition – Mission Viejo Infiniti

Acquisition – Mission Viejo Infiniti

Legacy Automotive Capital (Legacy) is pleased to announce the acquisition of Mission Viejo Infiniti located in Orange County, CA in partnership with Brett Oubre.

Legacy worked in close cooperation with Mr. Oubre as well as Infiniti to complete thetransaction in an abbreviated period of time in order to meet the terms of the Buy/Sell and minimize business disruption.

Benjamin Catanese, CEO of Legacy added: “From our first conversation with Brett it was evident that he was the kind of operator that we wanted to do business with. Brett understood the importance of deal structure and we cooperatively engineered the most efficient use of capital for this unique opportunity in Southern California. He is an ambitious dealer with a proven track record, and we look forward to supporting his growth agenda”.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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Acquisition – Kia of West Nyack and Clifton Park CDJR

Acquisition – Kia of West Nyack and Clifton Park CDJR

Legacy recently completed the sale/leaseback of Kia of West Nyack and Clifton Park CDJR in partnership with one of the country’s fastest growing dealer groups, Dennis & Co. Automotive Group (Dennis & Co.). Chelsea Mandel, founding partner of Ascension real estate advisory firm, advised Dennis & Co. on the transaction.

Dennis and Co., with stores in Manhattan and the surrounding greater New York City MSA, utilized Legacy’s sale-leaseback program to access the “Real Estate Blue Sky” or growth capital trapped in its real estate holdings. Dennis & Co. will use the proceeds to support its existing dealership footprint and to fund its future Buy/Sell expansion efforts.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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Results: Blue Sky & Working Capital Loans at 9%!!!

Results: Blue Sky & Working Capital Loans at 9%!!!

Survey Results: Blue Sky & Working Capital Loans at 9%!!!

Legacy Automotive Capital – Dealer Survey June 2023

Our recent New Car Dealer poll revealed that the most pressing issue dealers are facing today is the variable interest rate environment specifically as it relates to Blue Sky, Working Capital and Floor Plan loans.

Dealers are currently paying as much as 9% on money borrowed from banks and captive lenders, much of which was taken out as part of Buy/Sell transactions over the past twenty-four months. This cost of capital is a drain on dealer profitability and an inhibitor to future growth.

With the recent announcement that the Federal Reserve will continue to raise rates over the balance of 2023, this situation will only get worse. Working capital loans, blue sky loans and even floor plan lines are typically set using a spread over the Secured Overnight Financing Rate or SOFR. SOFR has risen from effectively 0% in early 2022 to 5.05% as of June 14, 2023 and New Car Dealers are paying the price.

What should dealers do?

Sell your real estate to Legacy Automotive Capital (Legacy) and lease it back. Legacy is currently paying up to 140% of appraised value for top brands in NFL and Amazon Prime markets. Extract the capital tied up in your real estate to pay down this expensive debt or use it to fuel growth.

  • Dealers make 5% – 7% return on their real estate
  • Dealers make 18% – 30% return on their business

Why tie up your equity in real estate when you make 2x to 3x more on your business?

Growth Capital

There is a buying opportunity forthcoming and dealers with “dry powder” are going to be in a position to make deals at favorable numbers in the coming months. This will be a chance to “average down” from the peak of 2021-2022 when earnings and the multiples paid on those earnings topped out. Don’t let expensive variable debt stand in the way of your next Buy/Sell opportunity!

Who uses Sale-Leasebacks?

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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Legacy’s growth highlighted in Automotive News

Legacy’s growth highlighted in Automotive News

Legacy Automotive Capital grows in real estate partnerships with dealers

Investment firm expects to have deployed more than half of its original $500M in starting capital by end of year and has another $1 billion fund available.

Dennis & Co. Auto Group completed two dealership sale-leasebacks with Legacy Automotive Capital this year to quickly free up millions of dollars in funding for the growing group to use to aid future acquisitions.

By not sitting on the stores’ real estate, “we’re able to focus on our primary business: car dealerships and selling cars,” CEO Brian Dennis told Automotive News. “The ability to sell these properties and become a tenant rather than a landholder has freed up capital to continue our growth.”

A typical sale-leaseback involves a dealer selling the dealership real estate and the buyer immediately leasing the property back to the dealer.

And it’s at the heart of Legacy Automotive of Exton, Pa., which said in 2022 that it planned to spend $500 million over three years by providing capital for dealership sale-leasebacks or assisting dealers in acquiring property in buy-sell transactions.

“We’ve been pretty aggressive deploying capital,” Legacy Automotive Chief Investment Officer Todd Marcelle told Automotive News.

He estimates the firm by the end of this year will have spent about $276 million and that it could get through its initial fund about six to nine months earlier than expected. Legacy Automotive also has a second fund worth $1 billion from a “family office” that’s now ready for use if needed, Marcelle said.

The company hopes to have $1.5 billion in assets by 2027, he added.

Legacy Automotive’s business has picked up as more dealers learn about it amid tighter lending environments from banks and higher interest rates, said Marcelle, who co-founded the group with Ben Catanese and TJ Doyle.

Dealers “have been coming to us because we invest all cash,” Marcelle said. “We’re not dependent on interest rates. We’re anywhere from 50 to 150, 200 basis points better than traditional lenders, so it’s a significant difference from a cost of capital standpoint.”

$18 million typically

Marcelle said he couldn’t share specific figures on how many deals Legacy Automotive has completed, nor at what cost, but he said a deal typically costs about $18 million. The firm has made dealership property purchases across the country.

Marcelle said even more funding could be raised from the unidentified family office.

“The family would like to keep investing with us and automotive retail,” Marcelle said.

Marcelle: “We invest all cash.”

But Marcelle doesn’t expect Legacy Automotive to tap the billion-dollar fund this year. It would likely take a deal worth hundreds of millions of dollars, the kind that may be executed by a public auto retailer, he said.

Marcelle said Legacy has not yet closed any deals with a public dealership group, but he said the firm is in “active discussions” with at least one public retailer that he declined to identify.
Legacy Automotive also helps replace traditional lending from banks, as was the case in a deal this summer.

The company on June 1 purchased the real estate for Mission Viejo Infiniti in California from automotive retailer Brett Oubre and his store partner, Lonnie Bennett.

Oubre, who said he owns six other franchised dealerships, said Legacy’s funding helped him complete the acquisition of the store Infiniti awarded.

Owning the dealership property is “very similar to having frozen capital in the parts department, having frozen capital in your used-car curtailments and other areas of the dealership,” Oubre said. “You basically have frozen capital in your real estate that you can’t deploy for a return.”

Some banks also have begun to contact the company in what Marcelle described as “syndicate” deals, where banks looks for a firm like Legacy Automotive to invest in deals with higher price tags.

And some dealers have inquired about Legacy Automotive partnering and investing in actual dealerships, similar to what a company such as Franchise Equity Partners may do, but it hasn’t yet, Marcelle said. That could come, but for now, Legacy’s buy-sell involvement is with the real estate.

“You couldn’t ask for a better landlord,” Dennis said. “As far as the terms of the lease, they’re very standard, no surprises. It was a quick and easy closing; they really know the industry.”

Dennis & Co. opted to sell properties to Legacy Automotive that house its Kia of West Nyack store in New York, which it acquired in 2016, and a Chrysler-Jeep-Dodge-Ram dealership in Clifton Park, N.Y., which it purchased in August 2022 from James Zappone.

 

‘A little more aggressive’

Dennis said he understands that some dealers prefer to own their land and buildings, but in his opinion, sale-leasebacks offer a favorable way for dealers hungry to grow and “find efficiencies of scale and generate that cash.”

“We have the opportunity to purchase operating companies for dealerships,” Dennis said. “It’s a little more aggressive, but it’s important for dealers that are looking to continue to grow to leverage that cash flow, that cash and equity, rather than sit on it for a long term.”

For Dennis, it’s about having more options. His group operates a dozen franchised dealerships and is in negotiations to acquire another store.

Dennis said he is considering using some of the money he gleaned from the property sales to Legacy Automotive to help with the pending acquisition.

“Legacy provided us an opportunity to release capital and generate liquidity that supports our acquisitions, but it isn’t critical — it just made it easier,” Dennis said.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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Audi and Volkswagen of Reading Acquisition

Audi and Volkswagen of Reading Acquisition

Legacy is pleased to announce the acquisition of Audi and Volkswagen of Reading adding Garnet Auto Group to its growing Northeast Portfolio.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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New Construction Honda Store

New Construction Honda Store

Legacy is thrilled to announce the first acquisition under our New Construction Program, where we provide 100% funding for dealers building state-of-the-art dealership facilities. Our recent closing will fund the construction of a new image Honda store in the Midwest, reinforcing our commitment to supporting dealers with innovative capital solutions.

Through sale-leaseback financing, we empower dealers to expand their footprint without tying up valuable equity—allowing them to focus on what they do best: growing their business. This milestone marks a significant step in our mission to be the premier real estate capital source for dealers, fueling dealership expansion across the country.

If you are interested in learning more about how Legacy can support your next project. please contact Austin Wolfington at 610.304.9347 or Austin@legacyautocapital.com

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Deal Announcement: Midwest Toyota, Subaru, Honda

deal announcement: midwest toyota, subaru, honda

We’re proud to announce our successful support of a leading Midwest dealer in their acquisition of a premier Toyota, Subaru, and Honda portfolio.

This transaction came with tight timelines due to a manufacturer Right of First Refusal (ROFR) process — but thanks to Legacy’s speed, flexibility, and deep industry expertise, we were able to execute a rapid close and deliver the capital needed to complete the buy-sell seamlessly.

At Legacy Automotive Capital, we specialize in helping top dealers grow through customized funding solutions — even under the most complex and time-sensitive conditions.

Congratulations to all parties involved! We look forward to supporting even more ambitious dealer growth stories in the months ahead.

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Unlock Capital Without Losing Control: Legacy Auto Capital Featured in Auto Remarketing

Unlock Capital Without Losing Control: Legacy Auto Capital Featured in Auto Remarketing

Legacy Auto Capital is proud to be featured in Auto Remarketing’s latest article on sale-leasebacks in automotive retail. The piece highlights how dealers can unlock capital tied up in real estate while maintaining operational control—a strategy Legacy Auto Capital specializes in. As noted in the article, sale-leasebacks offer liquidity without increasing debt or diluting ownership, providing dealers with the flexibility to invest in growth opportunities. Legacy Auto Capital’s approach enables dealers to convert real estate equity into usable capital, facilitating expansion and succession planning.

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Acquisition – South Austin Nissan

Acquisition – South Austin Nissan

Legacy Automotive Capital (LEGACY) is pleased to announce the successful acquisition of South Austin Nissan in partnership with IDEA Auto Group (IDEA).

Legacy worked directly with IDEA, a Top 150 Dealer group, and its CEO Julie Herrera on this transaction. Legacy structured the purchase of the real estate so as to provide IDEA with a portion of the Blue Sky funding, thus allowing IDEA to enter the deal with no debt.

Read the full article on Automotive News here.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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Acquisition – Foothills Mazda / Lincoln in Spokane, Washington

Acquisition - Foothills Mazda / Lincoln in Spokane, Washington

Legacy Automotive Capital (LEGACY) is pleased to announce our latest deal in 2024 with the acquisition of Foothills Mazda / Lincoln in Spokane, Washington. With this acquisition, Legacy has now expanded into the Pacific Northwest.

Contact Todd Marcelle at todd@legacyautocapital.com to receive a free assessment of your real estate.

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