Truck Stops Move Into the Fast Lane During Covid-19

August 27, 2020

Peter Grant, 
The Wall Street Journal

Thousands of restaurants and hotels along U.S. interstate highways closed during the pandemic, but most truck stops remained open to fuel the 18-wheelers that keep supply lines moving.

That has been good news for TravelCenters of America Inc., the largest publicly traded truck-stop owner. The company’s shares are up more than 50% since reporting quarterly results on Aug. 5, which showed a nearly 80% increase in net income over the year-earlier period. Other truck-stop owners have also benefited from rising e-commerce and delivery demand during the pandemic.

Truck stops, which cater primarily to 18-wheelers on long hauls, are emerging as one of the brighter spots for commercial real estate during the pandemic, along with better-known categories like warehouses and life-science buildings. These businesses have been able to profit even as demand for hotels, shopping malls, senior housing and other more-traditional property types has eroded severely.

Truck-stop real estate may be the most niche of all the property types doing relatively well now. The industry started with mom-and-pop operators but consolidated over the past half-century as scale became increasingly important for cutting deals with the country’s largest truck fleets. It is now dominated by three companies including TravelCenters, based in Westlake, Ohio.

The largest of the three is Pilot Co., with more than 750 truck stops, which was founded in 1958 by the Haslam family of Tennessee. Warren Buffett’s Berkshire Hathaway Inc. purchased a 38.6% stake in the company ...

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