Travel Center Industry Sees Growth Through Acquisitions
Building a truck stop from the ground up can take several years. The development process, due diligence, land acquisition, zoning and build out all take time.
Not to mention that 10+ acres established areas can be tough to find. Acquiring existing sites can help businesses hit the ground running while also saving money.
Saving Time and Money
Building a new location can be a two-year process versus buying an existing site, which typically takes three to six months. As a result, acquisitions are a good way to get operational and bring in revenue right away. Even if operators plan to make major renovations or upgrades, they can generate revenue while making improvements.
“The main benefit of growing through acquisitions is time,” said Kevin O’Hanlon, first vice president, investments, for Marcus Millichap, a real estate brokerage company. Marcus Millichap generously sponsored Fast Forward Focus, the NATSO Foundation’s fall leadership conference.
The second benefit is cost. The cost of a new build can easily exceed $20 million all in. O’Hanlon said a common misconception is that the cost of acquiring and improving a property cost more than developing a new location. “That is true in some cases, but if you buy at the right price that should never be the situation,” he explained. “Purchasing an existing truck stop could be less capital intensive at purchase.”
Operators also have to factor in the time that their capital is not working for them with ground up builds.
In a lot of areas, the only way to get the acreage needed for a truck stop is through an acquisition. “The truck stops in major cities that are in existence already are typically located in retail/industrial corridors leading to increased traffic counts and potential customers compared to the outskirts or non-established areas of the cities where land is available with limited buildout leading to a longer timeline to maximum potential of the property,” O’Hanlon said.
Creating a Growth Strategy
There isn’t a one-size-fits-all solution to finding the ideal property, but the ideal property will check the most boxes for what an operator is looking for. “Major highways, minimal competition is a good starting point, but that is widely known,” O’Hanlon said.
Geography is one of the most important considerations. “Where do you want to grow? These are fully hands on businesses,” O’Hanlon said. “A truck stop hours away without the proper internal buildout can lead to a business that is not operating at your pro forma numbers.”
O’Hanlon also recommends operators consider where people are moving to and locations with the most growth. “Trucks drive from point A to point B with point B being last mile distribution warehouses, grocery stores, Walmart’s, etc. What are the best trucking routes of tomorrow could help achieve maximum potential of a location?”
After an acquisition, one of the most common mistakes O’Hanlon sees is operators who aren’t maximizing the square footage of their lots. “If you have the space to add parking, a repair shop, a truck wash, or a freestanding casual dining or fast-food restaurant, take advantage of it,” he exclaimed. “Even if you’re collecting $10,000 a month in rent, it’s still $120,000 a year to add to your bottom line,”
O’Hanlon said Marcus Millichap has helped clients or set them up with leasing brokers to add tenants like Wendy’s or KFC to unused space that they own adjacent to their truck stops, which either increases their bottom line or generates capital if they decide to sell the buildings.
Another misstep O’Hanlon sees is operators setting rents for quick-service tenants too low. “Consulting with a leasing broker to understand market rents for your area could increase your revenue with a few phone calls,” he explained. “This cannot be done during the lease term, but if a tenant vacated or is coming up on the end of their lease term that would be the right time to reach out.”
Finding the Funds to Expand
O’Hanlon said most truck stop owners view their business as operators and the real estate is a byproduct of the business. At the same time, owners have large amounts of capital—sometimes over $30 million per site—tied up in their land.
“One way to release capital without pulling money out of the bank is to do a sale lease back, which means you sell off the real estate, but in doing so, you structure a long-term lease,” O’Hanlon said. “If you sell it for $10 million, you can use that $10 million for another location.”
Preparing to Sell
On the flip side, for operators who are considering selling their locations, O’Hanlon said curb appeal matters, and painting, landscaping, etc. can make a location more appealing. He also recommends having a Phase 1 completed, especially for an older site. “A buyer’s initial question is if the site has any environmental issues or Recognized Environmental Conditions,” he explained.
Having the Phase 1 completed can reduce the time it takes for the buyer to close and minimize the risk of a retrade (a price reduction). Additionally, O’Hanlon has seen buyers cover the cost in some deals.
It is also helpful for operators to identify the length of leases and agreements on their property. “Many operators have fuel supply businesses and prefer not to be locked into a new 10-year agreement. If you are considering selling and the fuel agreement is shorter term, I would recommend not extending until you have to,” O’Hanlon said, adding that a buyer who is a jobber will pay more if they can immediately increase the fuel margins.
Top Microtrends Shaping the Truck Stop and Travel Center Industry in 2025 Report
Staying ahead of industry trends—especially microtrends—enables travel centers to seize new opportunities, adapt to market dynamics and meet customer needs proactively. The NATSO Foundation created the Top Microtrends Shaping the Truck Stop and Travel Center Industry in 2025 Report to provide actionable insights to help operators maintain a competitive edge.
The Top Microtrends Shaping the Truck Stop and Travel Center Industry in 2025 Report was created with generous support from CAT Scale.
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