(Read more on the industrial market.)
FREDRICKSBURG, VA-One of the largest CVS distribution sites in the country has traded hands as part of a 1031 exchange. The sales price was $25.5 million--99% of the list price and at a 6.08% cap rate, according to broker Kase Abusharkh of Sperry Van Ness/the Kase Group, who represented the seller. Wink Ewing and Craig Pelouze of CB Richard Ellis represented the buyer.
"A rate in the 7% range would have been more typical for such a deal," Abusharkh tells GlobeSt.com. "But there was a lot of demand for the center--we received about 50 offers, half of which were institutional investors."
Located at 500 Lansdowne Rd., the 487,987-sf industrial building is situated on 39.4 acres. It was built in 1985 and is fully leased to CVS Corp. under a long-term lease. CVS uses the center to service Washington, DC, Maryland, Virginia and elsewhere in the Mid-Atlantic, Abusharkh says.
The buyer was a private company from New York; the seller, a high net-worth private investor from California. The long-term lease held by CVS is likely the key attraction to the facility. Overall, flex/industrial conditions in the Greater Washington area are healthy, due to the region's access to several interstates and ports, according to Delta Associates figures.
Still, though, the flex/industrial market last year softened as absorption fell below the long-term average due to easing demand and tenants vacating a few large blocks of space, it said in a recent report. Although vacancy declined during the second half of the year, it remains above the rate of one year ago.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
