DAYTONA BEACH, FL-A Florida LLC has purchased a Walgreen’s froma Florida-based private investor for $2.39 million. The13,841-square-foot Walgreen’s is the latest in a string of drugstore sales in Florida.

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Leon Brockmeier and Patrick O'Halloran, retail investmentspecialists in Marcus & Millichap's Tampa and Atlanta officerespectively, represented the seller, a Florida-based privateinvestor. James Defalco of Orlando-based James Defalco Inc.,represented the buyer, a limited liability company based out ofFlorida.

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Despite cap rates on Walgreens as low as 6.9 in Florida marketslike Miami, Brockmeier tells GlobeSt.com that the Daytona Beachstore sold at a 9.4 cap rate. “We got over 20 offers on theproperty,” Brockmeier says. “There is still plenty of appetite forstrong credits tenants like Walgreen’s, CVS and 7-11 and this wasan attractive cap rate.”

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Although Walgreen’s are yielding top dollar in Miami, Tampa,Orland and even Jacksonville, the 2620 South Nova Road location inSouth Daytona Beach fetched about the same price the seller paidwhen he bought it in 1997, Brockmeier says.

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“In net lease deals, any time you get below 10 years remainingon the lease term financing gets very difficult,” Mez Birdie,director of Retail & Investment Services at NAI Realvest inMaitland, tells GlobeSt.com. “That is one reason why you would seecap rates rise by 50 to 100 basis points. Below average sales wouldalso increase the cap rate.”

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Indeed, Brockmeier says the seller exited the investment becauseWalgreen’s only had six and a half years left on the original leaseand store sales per square foot were low. The seller is going to1031 his cash into a CVS.

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“The seller was an older gentleman and he was trying to get awayfrom the risk of Walgreen’s possibly not renewing the lease andhaving to retenant the building,” Brockmeier says. “He paid cashfor the property in 1997, so he got back his purchase price anddrew rent for 13 and a half years. It was a win-win situation.”

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