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GLENDALE, AZ-An Oregon couple has struck a $3.2-million deal for a rare find these days in the metro Phoenix market–a long term-leased, single-tenant retail property. The seller is MS Development of Carlsbad, CA and the hot ticket is an Osco drug store at 17204 N. 67th Ave. in the suburb of Glendale.

The14,841-sf building delivered a year ago, with Osco as a 20-year tenant. Jessica Zahn with the Phoenix office of Marcus & Millichap says her client, MS Development, has been very active in the real estate market over the last five years and is using the property as a 1031 Exchange although the up-leg of the swap has not been identified.

Zahn says several of her other clients are now interested in selling due to available aggressive pricing, low interest rates and lowering cap rates. The cold facts are many would-be sellers are refinancing instead because there is very little product available to satisfy the 1031 Exchange requirement. “They are afraid that they will not be able to replace that income stream because there is no up-leg for their exchanges,” she says.

The buyer, SB Invesments/FB Investments Glendale LLC, is a husband-and-wife team, Stefan and Elvia Boros from Portland. Jim Reiter of the Portland office of Marcus & Millichap is representing the couple in a portfolio transition from multifamily to retail properties. The couple bought the Osco facility from the proceeds of a multifamily property sale.

Reiter agrees that the 1031 Exchange market is very competitive. In particular high demand are single-tenant retail buildings with triple net leases from corporate-backed tenants, he points out.

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