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| Walgreens Oceanside |
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| Kevin Fryman |
OCEANSIDE, CA. - Hanley
Investment Group Real Estate Advisors, a nationally-recognized real estate
brokerage and advisory firm specializing in retail property sales, arranged the
sale of a single-tenant absolute net-lease Walgreens property located in north
San Diego County at 3507 Cannon Road in Oceanside, Calif.
The purchase price
was $7.4 million, which represented a cap rate of 5.0 percent.
Hanley Investment Group
Executive Vice President Kevin Fryman,
along with Ed Hanley, president of
Hanley Investment Group, represented the seller, a private investor based in Beverly
Hills, Calif. The buyer, a private investor from Northridge, Calif., was
represented by Jason Flashman/Flashman
Investment Group of Peak Commercial of Los Angeles.
“Investor interest in
single-tenant retail buildings is still very strong, especially ‘daily needs’
driven type of retailers like drug stores,” said Fryman. “Daily needs and
service-oriented retailers are thought to be more internet-resistant and can
drive foot traffic to other shops in the shopping center.”
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| Ed Hanley |
The market for Walgreens
properties remains active as investors are attracted to investment grade rated
companies with long-term leases,” added Hanley. Walgreens has a Standard &
Poor’s rating of BBB.
Built in 2007, the
14,380-square-foot freestanding building with a drive-thru is located on a
1.64-acre pad within a former Ralphs-anchored shopping center that includes
national tenants such as McDonald's, AutoZone and Pizza Hut.
There are more
than 15 years remaining on the Walgreens primary lease with ten five-year
renewal option periods.
Walgreens has a 10-year
history at this location and benefits from the strong demographics in the area
and close proximity to two regional hospitals, a large retirement community and
convenient freeway access, Fryman notes. “Over 42,000 cars per day travel
through the signalized intersection of Cannon Road and Melrose Drive. Melrose
Drive is a major north/south thoroughfare in the city of Oceanside.”
Fryman adds, “More than
280,000 people live within a five-mile radius of the property and have an
average household income of over $79,000 within a one-mile radius.”
Two regional hospitals are
located less than five miles from Walgreens, Tri-City Medical Center and
Scripps Coastal Medical Center. Walgreens is also near Ocean Hills Country
Club, an active senior retirement community with over 1,600 homes.
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| Jason Flashman |
“This transaction is
another great example of the high demand for well-located single-tenant
investments, specifically for credit retailers like Walgreens with a corporate
guaranteed lease with investment grade credit,” said Fryman.
“The absolute
triple-net (NNN) lease offers zero landlord responsibilities since the tenant
is responsible for the costs of real estate taxes, property insurance, and
maintenance in addition to rent.”
“There has only been one
other Walgreens that has traded hands in San Diego County in the last 12
months,” said Hanley. “According to CoStar, only eight Walgreens with more than
10 years remaining on their initial lease have sold in California in the last
12 months for an average cap rate of 5.35 percent compared to 13 transactions
in the 12 months prior to that for an average cap rate of 5.03 percent.”
“With continued volatility
in investments such as stock and bonds, investors are looking to high-quality
single-tenant retail assets that require little to no maintenance,” said
Hanley. “A single-tenant investment such as Walgreens provides long-term cash
flow, with relatively low risk. As investors continue to look for security, we
expect that the demand for these high-quality single-tenant investments will
remain strong through 2017.”
For a complete copy of the company’s news release,
please contact:
Anne Monaghan
MONAGHAN COMMUNICATIONS, INC.
830.997.0963
