"It happened about a week ago," Burch, who is staying on as head pharmacist, tells GlobeSt.com. "It was a good offer and I think it will keep the integrity of a small store. But the fact is the traditional store just can't make it; the margins aren't that good, especially in an area like this where rents are going up."

Indeed. Last time Burch signed a lease, the going rate was $15 per sf. This time around, the going rate is $24 per sf. In between? In 1997, the 160,000-sf shopping center and associated apartment units sold for $15.5 million to publicly traded Federal Realty Investment Trust.

Pharmaca's vice president of design Russell Precious, in town to oversee the renovations, says the company is spending about $750,000 to purchase the business from Burch and renovate the space -- its third store altogether and its first first outside Boulder. "We have strong roots here," Precious tells GlobeSt.com "The top guy is from Vancouver, B.C., was formerly in the natural foods business, and almost merged with Stan Amy (founder of Nature's natural food stores) several years ago."

Instead, Barry Perzow merged his Vancouver-based natural food store chain Capers Inc. with Boulder-based Alfalfa's. It was then that he hooked up with investor Dale Schwartz to buy and transform Broadway Drug and General Store in Boulder.

Soft lighting. Modern art. Pastel-colored walls. Armchairs in the "tea corner." Certified herbalists and nutritionists to complement the pharmacists. A computer for surfing the Internet. "We are not an advocate for natural remedies; We are not an advocate for prescription drugs," Perzow has been quotes as saying. "We are advocates for good patient care."

Precious says Pharmaca chose Portland for its third store because of Town Pharmacy's location -- on the edge of the city's most dense and most popular residential and retail district. "It was either Seattle, Portland or Eugene, and we just happened to find a very great location," says Precious. "The demographics in Portland are particularly good, and this particular neighborhood is particularly good."

Precious says Pharmaca's plan is to "take a couple of areas we really like and do a cluster of stores ... (because) it wouldn't make sense to do just one. But if we can do several and extend to Eugene and as far south as Ashland ... ."

Precious says the company hopes to have five stores open by the end of the year. "You need a certain number to be viable," says Precious, "Five gets us fairly close to breakeven, and then a few more allows our investors to get something."

In addition to Western Oregon and Colorado, Precious says the company plans to focus on Northern California, and has already taken down a location in Mill Valley. Helping site acquisition go more smoothly, says Precious, is the fact that most neighborhood pharmacy owners are looking for an exit strategy.

"They are all under a lot of duress," says Precious. "Retail sales have been knocked out by the big chains and the margins on pharmaceuticals are half what they used to be due to HMOs."