X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

FAIRFAX, VA-Calkain Cos., headed by Jonathan Hipp, has closed on what it says is the largest net leased retail deal in the Washington, DC area in years. Representing both buyer and seller, it facilitated the trade of a co-branded Walgreens and PNC Bank ground lease here for $13.8 million. The sale price represented a 5.9% cap rate. Still under construction, the parcel is located in the southwest corner of Route 29 and Nutley Road. The building is expected to deliver this June, Jeff Bogart, tax strategy specialist with Calkain, tells me. The buyer is a local firm, while the seller is the Washington Property Co. There have been many Walgreens ground leases trading in the area over the past three years, but none at this low of a cap rate, Bogart explains. “That was due to a variety of factors, the first of which is that the structure of Walgreens ground leases are traditionally at a 20-year initial term with a 10% rental increase in year 11. However, Walgreens wanted this particular property very badly, so it negotiated  a lease that had a 10% increase every five years, which is extremely rare for Walgreens.” PNC Bank negotiated similar terms, he says. Bogart adds he has only seen one other Walgreens lease structured in a similar fashion, but that was in California.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.