CHICAGO—As reported in GlobeSt.com, even though many types of single tenant net leased properties have attracted interest from investors, sending cap rates on a long-term plunge, name brand drug stores, especially Walgreens, draw more attention. The Boulder Group, a net leased investment brokerage firm in suburban Chicago, for example, has completed the sale of a single tenant triple net leased Walgreens property located at the southeast corner of West 95th St. and South Pulaski Rd. in Evergreen Park, Illinois for $10,833,333.
According to Real Capital Analytics, this property sale ranks in the Top 5 of lowest cap rates ever recorded for a Walgreens property priced over $5 million. This is the second transaction ranked in the Top 5 that the Boulder Group has sold in the past four months, company officials say.
“While single tenant properties are selling in all types of locations; core markets, like Chicago, are at the forefront of investor demand,” says Jimmy Goodman, a partner of Boulder.
According to a recent research report published by Boulder Group, cap rates for Walgreens and CVS properties reached their historic low in the first quarter of 2014. Cap rates for Walgreens properties compressed by 15 bps from the third quarter of 2013 to the first quarter of 2014.
“Part of the compression can be attributed to the significant decline of 9% in the supply of drug store properties currently being marketed,” according to the new report. The Walgreens rate now stands at 5.6%, with CVS at 5.9% and Rite Aid at 7.75%.
This 14,820-square-foot Walgreens will not open until July 2014. The Pulaski and 95th intersection has a great deal of auto traffic, much of it headed to the shopping center, anchored by a Target, a Home Depot, and a Jewel-Osco just across the street. The Walgreens store fully leases the property will have 20 years of primary lease term remaining, with rental escalations renewal options included.
Randy Blankstein, president of Boulder, and Goodman represented the seller, a Midwest-based developer, in the transaction. The buyer was a Massachusetts-based limited partnership in a 1031 exchange.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
