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SANTA FE SPRINGS, CA-In a private investment deal, a partner in Los Angeles-based Conquest Student Housing LLC paid $5.5 million for a property triple-net leased to Walgreens for 75 years. The seller was Glenn Riley Land Associates LLC, a San Francisco-based developer that completed the project last year.

The property at 13331 Telegraph Rd. includes a 14,076-square-foot building on 1.46 acres. The lease is valued at $385,000 per year. The deal had a reported cap rate of 7%.

No brokers were involved in the transaction, but Dan Lem, owner of LEM Real Estate in San Francisco, served as adviser to both parties. Lem, who specializes in selling Walgreens properties, says the sale typifies the kind of property many smaller investors are eager to acquire. “It’s an absolute triple net deal, national credit, no headache, bulletproof lease, bulletproof tenant,” he tells GlobeSt.com. “It’s a peace of mind investment. That the big thing. People with some kind of money want a place to park it that’s safe.”

Lem calls Walgreens probably the most sought after tenant for a net-lease deal, at least in the drugstore category. “Everybody wants to buy Walgreens Drugs,” he says. “Even though leases are flat, it’s solid credit. It’s as boring and as desirable as it gets. It’s so boring that a lot of people want it.”

While Lem acknowledges the level of activity has fallen even for net-lease deals, he maintains there are people with capital to invest, but only in the right kind of property. “There’s still a lot of money out there, and that money wants to invest in something solid,” he says. “There’s a segment of the population that always wants something that’s rock solid, and you can’t get any more solid than Walgreens.”

Lem reports he has sold close to 40 Walgreens properties over the past five years. He says he has several more in negotiation, including two with letters-of-intent. All the properties are outside California.

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