CHARLOTTE, NC-Demonstrating the appetite of some investors for higher-risk ventures, a Rite Aid in Gastonia has traded for $2.3 million. Although there were CVS and Walgreens pharmacies on the market, the private, Mid-Atlantic real estate investor chose Rite Aid in hopes of driving higher yields.

Calkain Cos. brokered the transaction of the 10,900-square-foot pharmacy building that’s leased to Rite Aid under a long-term, triple net lease. Calkain associate Andrew Fallon exclusively represented the buyer.

“Rite Aid doesn’t have the same creditworthiness as a Walgreens or CVS in the current market,” Fallon tells GlobeSt.com. “So there was a significant amount of underwriting in terms of the real estate and understanding specific store performance.”

Indeed, pharmacies remain a desired segment of the net lease market, but Rite Aid properties have been scrutinized, given the company’s operating performance. The property is located at a signalized corner across the street from a Walgreens, one of Rite Aid’s main competitors.

Fallon worked with the buyer to conduct due diligence on the store location and sales before deciding to acquire the asset. Even with the perceived risk, the purchaser was able to secure competitive financing for the acquisition.

“The difference in cap rates between the Walgreens and a CVS versus a Rite Aid is significant in today’s market—300 to 500 basis points,” Fallon says. “The buyer got comfortable with the store performance and the location was comfortable enough to accept the inherent risk in the acquisition.”

Rite Aid operates approximately 4,700 pharmacies in 31 states and the District of Columbia. It is the largest drugstore chain on the East Coast and the third largest drugstore chain in the county.