HESPERIA, CA-A brand new retail space here that is fully occupied by sole tenant Walgreens has sold for $5.7 million. Buyer Smith & Sons Properties LLC has acquired the property as an upleg to a 1031 Exchange transaction.”It was a single-tenant, net leased investment,” according to Kevin Held of Grubb & Ellis/BRE Commercial’s Net Leased Investment Group. Held, along with his Grubb & Ellis/BRE Commercial colleague Chuck Klein, acted on behalf of both Smith & Sons Properties LLC and seller Evergreen-I & Main LLC in the recent deal. Held tells GlobeSt.com that “it was the 25-year lease variety, which means Walgreens is responsible for everything related to the property, including the actual building.” Walgreen’s lease began in May 2004, according to Held, who says the buyer was attracted to the property because it has a “25-year lease to an A-rated drugstore,” which provides “security and stability of the income in a growing Southern California community.”

Located at 17373 Main St., the retail space encompasses 14,560 sf. Built by the seller, which is one of Walgreens’ major preferred developers, it is “a standard, prototype (Walgreens) store,” Held tells GlobeSt.com.The deal is one of many retail sales that have occurred recently as part of 1031 Exchange transactions. Held says the prevalence of 1031 Exchanges has “absolutely had an effect on the retail market.” As Held points out, “one of the factors that has really driven cap rates down has been the 1031 Exchange. In addition, we’re seeing a lot of larger properties being sold to the individual 1031 Exchange investor. In the past, institutions, REITS and large developers were the typical owners.”

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