CHICAGO—Even though many types of single tenant net leasedproperties have attracted interest from investors, sending cap rates on a long-term plunge, name brand drugstores, especially Walgreens, draw more attention. The Boulder Group, a netleased investment brokerage firm in suburban Chicago, for example,has completed the sale of a portfolio of five Walgreens locatedthroughout the US for $39,011,803. The properties are located inMaine, Massachusetts, Minnesota, and South Carolina.

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Randy Blankstein andJimmy Goodman of Boulder represented both thebuyer and seller in the transaction. The seller was a Midwest-basedprivate partnership and the purchaser was a Midwest-basedinstitutional investment firm.

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“This portfolio represented a rareopportunity for an investor to acquire a large geographicallydiverse portfolio of long term triple net leased Walgreensproperties,” says Blankstein, president of Boulder. The majority ofthe interest was among international investors, 1031exchange trade buyers, and institutions.

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According to a recent research report published by Boulder, caprates for Walgreens and CVS properties reached ahistoric low in the first quarter of 2014. Cap rates for Walgreensproperties compressed by 15 bps from the third quarter of 2013 tothe first quarter of 2014.

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“Part of the compression can be attributed to the significantdecline of 9% in the supply of drug store properties currentlybeing marketed,” according to the report. The Walgreens rate stood at 5.6%, withCVS at 5.9% and Rite Aid at 7.75%.

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The portfolio included the followingWalgreens properties:

  • 720 Main St., Clinton, MA
  • 32 Main St., Lakeville, MA
  • 268 Main St., Belfast, ME
  • 1112 Civic Center Dr., Rochester, MN
  • 1537 Charleston Hwy., West Columbia, SC

“Walgreens properties with 20 years oflease term are one of the most sought after assets in the singletenant net lease market,” says Goodman, a partner at Boulder, “andwe had strong demand for this portfolio.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.