In a move The Banks Report predicted twice in the last six weeks, Sonic Automotive has traded a Cadillac dealership for one of John Elway’s two Chevrolet stores in the Denver market. (November Dealership Buy-Sell Update)
The swap came about because Sonic needed real estate on which to build a new facility for the Murray Imports BMW store it purchased last year. Sources say Sonic had tried to acquire John Elway’s Chevrolet dealership on South Colorado multiple times but had been rebuffed by the NFL Hall of Fame quarterback. The dealership sits on enough land for Sonic to build another and separate dealership — in this case, a state of the art BMW facility.
So the idea to trade Sonic’s Don Massey Cadillac dealership in Lone Tree to Elway was hatched. Exchanging stores, while rare, is not unprecedented. Last year, the DCH Automotive Group, prior to its acquisition by Lithia Motors, “traded” its BMW Greenwich, CT dealership for two of the Penske Automotive Group’s two Honda stores. The moves were actual acquisitions but was part of a deal the two groups had agreed to.
The Sonic/Elway trade is a win for both groups. Elway expands its portfolio and gets a Cadillac dealership franchise while Sonic gets a strong Chevrolet store and enough real estate on which to build a new BMW store.