WINTER PARK, FL-On the heels of closing a $7.7 million Walgreen’s in Winter Park, Brett Chetek, first vice president at CB Richard Ellis in St. Louis, has exclusively listed a 15-store Walgreens portfolio across five states.
Chetek represented a private investor from Greensville, S.C. in the purchase of the Walgreens in Winter Park. The seller, GE Capital, redeveloped the Shell gas station site as a Walgreens in 2008. The store sits on the corner of South Orlando Ave. and Fairbanks Ave. The deal closed at a 7.25% cap rate in 60 days.
“This is not the typical prototype Walgreens store,” Chetek tells GlobeSt.com. “It has high architectural details and fits in well with the Downtown Winter Park environment. Twenty-three years are remaining on the 25-year triple net lease.”
Chetek just listed 15 freestanding Walgreens stores as a portfolio. The stores are in Florida, North Carolina, Missouri, Illinois, and Michigan. Twelve of the stores are located in Greater St. Louis.
“Pension funds, REITs, private investors, global investors, I believe, will all be bidding on this portfolio,” Chetek says. “The reason is the lease expirations are very well staggered. On four of the stores, the leases expire in the next five years. There are 10 years left on the leases at three of the stores. Then you have eight stores that have at least 20 years left and two stores that are brand new.”
According to Chetek, the average rental rate in the portfolio is less than $20 per square foot, which is far less than what new Walgreens stores are paying. He says one of the most attractive aspects of the portfolio is that it can be delivered free and clear of debt. The approximate portfolio net operating income totals $4.45 million.
“From the research that I’ve done over the past two weeks with my CB Richard Ellis research department in St. Louis, this is the largest Walgreens portfolio on the market from a single investor,” Chetek says. “The seller is disposing of the properties for estate planning purposes.”
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