PHILADELPHIA –- A CVS/pharmacy in Lebanon, PA has traded in a 1031 Exchange transaction for approximately $6 million, reports Marcus & Millichap Real Estate Investment Services.
The deal was among two 1031 Exchange net lease deals reported by the brokerage firm. The other transaction involved a Walgreens in Baltimore that sold for a little over $4.8 million.
The CVS at 2200 West Cumberland St. in Lebanon, PA sold for $5,946,000 at a cap rate of 6.45%. The 13,225-sf property was built in 2008 and relocated from the Lebanon Valley Mall across the street. There are 22 years remaining on the lease term.
Michael Shover and Matt Gorman, senior associates in Marcus & Millichap’s Philadelphia office, represented the seller of the CVS/pharmacy, a developer. The investor, a New Jersey-based limited liability company, was secured and represented by Michael Lombardi, a senior associate in Marcus & Millichap’s New Jersey office.
The Baltimore Walgreens, located on 2.16 acres at 2310 W. Patapsco Ave., traded at a cap rate of 7.71%. Upon the closing of the sale, there were 10 years remaining on the lease at the 15,120-sf property.
The investor, a personal trust, was secured and represented by Brandon Michaels, vice president investments in Marcus & Millichap’s Encino, CA office. Also providing representation in the deal was Peyton Banks, an associate vice president in the firm’s Washington, D.C. office.
Marcus & Millichap’s Shover says that there is strong demand for net lease pharmacy assets and 1031 exchange money is driving prices in these transactions higher. He notes that there was significant competition among a number of qualified buyers for the CVS property.
In terms of the Baltimore transaction, Shover says, “The Walgreens transaction is an excellent example of our firm’s platform and national reach. The California-based 1031 exchange buyer was specifically focused on acquiring a Walgreens drugstore, and in this case, the asset was located on the other side of the country.”