HOLDEN BEACH, NC.-A Walgreen’s building has traded for $4.4 million in a small beach town halfway between Wilmington, NC and Myrtle Beach, SC. Walgreen’s has 24 years left on the lease.
The Boulder Group, a net leased investment brokerage firm in Northbrook, IL, brokered the sale. Boulder Group’s Randy Blankstein and Jimmy Goodman represented the buyer and seller in the transaction. The seller was an unidentified North Carolina developer. The purchaser was a Chicago-based private investor in a 1033 exchange.
“This property was never listed on the market,” Goodman, a partner at The Boulder Group, tells GlobeSt.com. “The buyer had a property condemned and needed to place they money he received. The sale shows how desirable investment grade rated single tenant properties are in today’s triple net market.”
Goodman says Walgreen’s remain in high demand in both the 1031 and 1033 exchange investment community seeking credit tenant properties, but 1033 exchange deals are relatively unique. The Holden Beach Walgreen’s sold at a 7.5 cap rate, demonstrating a dramatic cap rate compression since the first quarter.
David Stuart at Coldwell Banker Commercial in Sunset Beach, NC, tells GlobeSt.com the Walgreen’s deal is uncommon in the a slow Holden Beach real estate market. Holden Beach doesn’t have a large commercial sector, he says, and the lack of available financing for businesses that are not owner-occupied has stymied local trading.
Walgreen’s is the market’s exception in a small community of about 1,000 full-time residents. The vacation island’s mid-summer population swells to more than 10,000 as visitors flock to the eight miles of beaches.
“Four million is a healthy price for this Walgreen’s,” Stuart says. “Holden Beach is a destination location, and this Walgreen’s is in a prime location in our market.”
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