Dean Zang and Mark Taylor of the Taylor-Zang retail group in the Philadelphia office of Marcus & Millichap, and Thomas Gorman and Matthew Gorman of the Gorman retail group in the same office, represented both the seller and the buyer. The buyer is Deer Park Realty Co. LLC, based in Deer Park, NY, which paid cash in a 1031 exchange.
"We were pleased to get a cash buyer," Zang tells GlobeSt.com. The property was listed in Nov. 2007, and after just two weeks, the M&M team had a letter of intent from the buyer. The buyer signed an agreement of sale and went to closing within 51 days.
The sale price represents a 7.2% cap rate and $394.37 per sf. "As far as we're concerned, it's an excellent cap rate," says Zang. "This is an active market for Rite Aid, and we have several other Rite Aid locations for sale in Pennsylvania and New York. The cap rates are high on these units in comparison with CVS and Walgreen's locations. Despite a shake-up in Rite Aid's credit right now, most investors are looking at the chain's fundamentals."
Among the fundamentals, he says, is the question: "Would this make a good location for another drug chain?," which is generally answered in the affirmative. The 335 Main St. property is a relocation of a Rite Aid unit a few blocks away. It is the only national pharmacy chain in town, which Zang says "is consistent with Rite Aid's approach to dominating small town markets in Pennsylvania." The closest CVS and Walgreen's are about a 20-minute drive away.
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