ATLANTA—Triple-net deals across the Southeast continue to demonstrate that conservative buyers are willing to pay aggressively for premium tenants with short supply and low interest rates—and that attractive financing is available. The latest triple net deal to trade in Atlanta is a 14,820-square-foot Walgreens.
The $4.8 million sale price presents $327.13 per square foot. The 30-year corporate triple-net lease has 23 years remaining.
“We continue to see compression in CAP rates for properties leased to investment grade tenants,” Mac McCall, managing director of Franklin Street, tells GlobeSt.com. “
“This was a seven-year old Walgreens that hit top of the market pricing.”
McCall and his associate, Bryan Belk, represented the seller in the transaction. The buyer is a private investor out of Atlanta and the seller is a local investment company.
“Financing is very competitive for premium tenants with high credit ratings,” McCall says. “Conservative buyers will pay aggressively for investment-grade tenants and this trend will remain present as long as supply remains tight and interest rates remain low.”
The Walgreens is located at 1056 Eagles Landing Parkway, Stockbridge, GA, an Atlanta suburb. There are more than 100 Walgreens stores near Atlanta and there are more than 7,900 nationwide.
“Short supply and low interest rates will continue to push values up, especially for net-leased investments,” McCall says. “The limited supply will continue to push CAP rates lower until interest rates start to rise.”
To McCall’s point, HFF just secured $13.5 million in acquisition financing for a 10-property single-tenant retail portfolio located in multiple states. HFF represented A. Duda & Sons to place the 10-year, fixed-rate CMBS loan through Prudential Mortgage Capital Company. Chris Drew tells GlobeSt.com, “This financing shows that CMBS debt is readily available for net leased assets located in secondary and tertiary markets for top tier sponsors.”