Limestone Closes on Large Walgreens Portfolio
Limestone asset management closes in on 27 locations throughout the US.
On June 3, 2021, a joint venture between Limestone Asset Management and Orion Real Estate Group closed on a 27-location Walgreens portfolio for $133 million. The portfolio encompasses 27 locations throughout the country.
“We are extremely pleased to acquire this large Walgreens portfolio, featuring excellent sites with long-term value and a high-quality credit tenant,” said Ibrahim Al-Rashid, chairman of Limestone Asset Management, in a prepared statement. “This purchase reflects Limestone’s dedication to expanding its portfolio over all asset classes.”
Wells Fargo is providing financing for the portfolio transaction. Kevin Sanz, president of Orion Real Estate Group, led the buyer group. Brian Pfohl, executive vice president of CBRE and Maury Vanden Eykel, senior vice president of CBRE, represented the seller.
During the pandemic, investors have been drawn to essential retail, such as Walgreens pharmacies. These retailers have performed well because they have drive-throughs and offer convenience to get smaller household items. “It has definitely been top of mind for investors as they look for deals,” says John Feeney, senior vice president of The Boulder Group. “This deal is emblematic of the push to essential retailers through the pandemic.”
Feeney says that Walgreens is a “gold standard” tenant in the net lease business.
“They’re investment grade,” Feeney says. “You can get great debt on them. It checks a lot of boxes for a lot of people [investors], especially in this COVID world we’ve been living in for a while during the pandemic.”
Feeney says the Limestone deal shows the demand for the space within the sector, ranging from 1031 to one-off private investors to institutions. However, there might not be enough product on the market to satiate this demand in many cases.
“I think the less product there is, the more aggressive pricing will get,” Feeney says. “It just comes down to supply and demand at the end of the day.”
Limestone Asset Management is an affiliate of Orion Real Estate Group. Limestone, founded in 2010 to invest in and acquire all classes of real estate, uses Orion Real Estate Group’s expertise to complete all of its North America-based transactions. Orion Real Estate Group, founded in 1978, provides commercial real estate services to investment clients worldwide. The firm has been involved in more than $4 billion in transactions and holds a portfolio exceeding $800 million.