Walgreens NNN Properties for Sale
Pharma Property Group has exclusively listed three NNN Walgreens for sale on the West Coast and Mountain West totaling $22,611,892 in value with an average lease term of 12 years and all have 10 (five-year) options.
Walgreens NNN property for sale has been around since the 1990ās. Third party build-to-suit developers began working with Walgreens to build out their national footprint and sell the underlying real estate to outside real estate investors.Ā Typically, Walgreens for sale in the ā90ās were 20-year terms and then eventually moved to 25-year lease terms.Ā The landlords of Walgreens properties vary from institutional REITs to private investors throughout the country.
There are several ways to evaluate Walgreens NNN properties for sale which include lease length, lease option structure, rental increases, tenant credit, and underlying real estate quality.Ā
What Is an NNN Investment?
NNN investments haveĀ many different lease types and are in many industries.Ā Some NNN leases that are true absolute net leases have the landlord responsible for nothing whatsoever, and all expenses are paid directly by the tenant.Ā Because the term āNNN leasesā is used loosely, some brokers and investors may refer to a lease as NNN, even though the landlord may be responsible for roof, structure, parking lot, and may have to be reimbursed by the tenant for taxes or insurance.Ā Walgreens NNN property for sale is typically absolute net, or the landlord is responsible for the roof, structure, capital improvements to the parking lot, and other minimal property repairs.Ā
Having a real estate broker that has sold numerous Walgreens properties is essential when purchasing a Walgreens investment.Ā Brokers that have experience in selling drugstores — including Walgreens, CVS, and Rite Aid — are able to underwrite these assets properly, allowing an investor to weigh their risk versus return.Ā
Individual drugstore performance, real estate fundamentals, lease renewal likelihood, demographics, and traffic counts are a few considerations, in addition to the lease structures, that real estate brokers familiar with Walgreens properties will be able to analyze correctly for potential investors.
Real estate brokers who specialize in NNN properties typically will also have access to both their own listings and also off-market NNN properties for select investors they work with.Ā It is prudent for any drugstore investor working with an NNN real estate broker for the first time to ask for a list of their personal drugstore transactions and exclusive listings that they have full control over.Ā Ā
A real estate broker who has personally sold and consistently has a number of Walgreens properties exclusively listed will be the most qualified for an investor to work with. Such a broker can also ensure for the investorĀ that any Walgreens NNN property for sale is underwritten correctly and that all risks to the assets are known upfront.Ā Ā
What to Know Before Buying a Walgreens NNN Property
The positives to Walgreens property ownership include a strong corporate lease guarantee; healthy firm lease term before options; minimal landlord responsibilities; and typically good retail corner locations.Ā Walgreensā thousands of locations across the country demonstrate that they are a safe investment for property owners who want little management work and a secure income.Ā
The barriers to entry to the drugstore sector are much greater in comparison to other retail chains. However, because of Walgreensā stores unique positioning,Ā they have the ability in the future to continue to make strategic partnerships within the healthcare sector.Ā
With such a large North American footprint, many Walgreens stores are on the market,Ā and investors must treat each location differently when considering a purchase.Ā Not all Walgreens leases are the same and all stores have different sales volumes.Ā As with any real estate investment, owners must also consider when purchasing Walgreens NNN property any prior environmental history, building and roof age, easements, property restrictions, future possible development, and other underwriting factors.Ā
Another benefit to purchasing a Walgreens property is that prior to the development of a Walgreens, the developer or Walgreens typically reviews the parcel for the above considerations. As a result, there may be prior third-party reports on the site, allowing for a more transparent purchase.Ā Additionally, Walgreens has approved and reviewed each store prior to construction for long-term positioning and profitability in the area.Ā Ā
Most Walgreens are located on signalized corners with high traffic counts and good access.Ā Many are also located in surrounding retail corridors that have complementary retail or healthcare tenants that will drive traffic to the Walgreens location.Ā A tenant like Walgreens allows investors many options when financing their investment.Ā Lenders know that Walgreens leases are safe, and rents are predictable because of the chainās strong financial position.Ā For this reason, investors can achieve some of the best financing available with Walgreens in the NNN property market.Ā
What Are the Differences Among Walgreens Properties?
The main difference between lease types for Walgreens NNN property for sale is that they are not all absolute net.Ā Some leases have the landlord responsible for the roof and structure, while others may have certain expenses such as tax, insurance, landscaping, or other maintenance items paid for by the landlord.Ā
These expenses are sometimes reimbursed by Walgreens but may not be reimbursed, giving landlords additional out-of-pocket expenses that must be considered in their pricing.Ā Walgreens with more management or out-of-pocket expenses will trade at higher CAP rates because there is a smaller buyer pool willing to deal with certain management items.Ā Ā
Walgreens leases will also vary in firm lease term length before the option periods and may have different lease option structures.Ā The longer the guaranteed rent in the firm lease term before the lease renewal options, then the lower the return for an investor.Ā In addition, shorter initial lease terms have fewer financing options available during the purchase and at a possible refinance event once an investorās loan comes to maturity.Ā Ā
Walgreens locations need to be viewed differently even if they have similar lease terms remaining before the options and similar lease types.Ā Analyzing the lease renewal probability is the most important analysis an investor can do during a purchase of a drugstore.Ā The likelihood of lease renewal of a Walgreens NNN property thatās for sale hinges on many factors.Ā When an investorās loan comes due, performance of the Walgreens location, surrounding competition, local population, and employment growth are just a few issues that come into play when analyzing if Walgreens plans to renew their lease.
- Only free-standing national chain drugstore in Sturgis and only Walgreens for over 15 miles.
- This is the closest national pharmacy to Sturgis Hospital, an 84-bed health center located 1.6 miles from the property.
- Over 16 million square feet of industrial space within a 3-mile radius and 2.3 million square feet of retail space within a 2-mile radius.
- Located with frontage on Centerville Road, with over 16,000 VPD, serving as Sturgis's main North/South thoroughfare.
- Walgreens has been operating at this location for over 19 years.
- Two blocks north of the West Campus of Maine's State Capitol Buildings.
- Two Government campuses totaling 1.59 million square feet within a 1-mile radius.
- Maine General Health's Augusta Hospital is the largest private employer serving 88 cities in the region.
- Augusta and its downtown area are Designated Opportunity Zones.
- Walgreens signed a new 15-year lease with 5% increases every 5 years.
- Zephyrhills is the largest city in Pasco County and has seen a 29% population increase since 2010.
- Over 950 new homes under construction within 2 miles of the Subject property.
- Florida's absence of state income tax makes it an attractive location for investment
- There are 7 assisted living facilities within 3 miles of the Subject Property to accommodate the 70% of the Zephyrhills population that are 50 years old and older.
- New developments within 2 miles include Evolve at Waterford, Exchange at Westgate, Brunswick Forest and Inspire at Brunswick Forest totaling 1,178 units.
- 1 million square feet of retail space in the immediate 1-mile radius anchored by Aldi, Harris Teeter and Walmart Supercenter.
- Located on a signalized corner with frontage on Ocean Highway E (56,000 VPD) and with direct access to Andrew Jackson Highway NE (71,000 VPD).
- Lelandās population increased 70% from 2010 to 2020 and is currently growing at a rate of 8.25% annually.
- Positioned less than 2 miles from Novant Health Brunswick Forest Medical Plaza which services the Greater Leland market.
- With a 2.5% corporate tax rate, North Carolina is continually ranked as one of the best business climates in the United States. CNBC named the state as Americaās top state for business.
- This is the only Walgreens or CVS for over 13 Miles.
- Purcell Municipal Hospital, a brand new $18 million state-of-the-art facility opened in 2022.
- The property benefits from its position on the signalized hard corner of West Washington Street and Green Ave which is the main thoroughfare running through Purcell.
- The Property is located just east of I-35, which serves as the main connector between Oklahoma City to Fort Worth/ Dallas.
- The 5-mile population has grown over 10% over the past four years and is projected to continue expanding at over 3% through 2029.
- Chickasaw Nation Purcell Health Clinic employs approximately 100 employees and serves more than 10,000 patients every year.
- Within a 5-mile radius, the population is Ā±365,021 residents within Ā±154,024 households.
- Ohio State University is located about 3 miles from the Property and enrolls Ā±60,000 students.
- The Property sits two blocks from Northern Lights shopping center, a 360,471 square foot mall.
- CVS is located directly across the street making this a strategic location for both CVS and Walgreens. CVS has closed its retail portion of the store and only the pharmacy remains open.
- Nationwide and JP Morgan Chase employs over 35,000 employees in the Columbus market, with Intel recently announcing a $20 billion local investment in manufacturing, creating over 10,000 new jobs.
- Columbus, Ohio is the 7th largest economy in the United States, and Ohio has 0% state corporate income or profits tax.
Recently Sold Drugstores
- Located less than 0.2 of a mile from Russell Medical, a not-for-profit acute care hospital.
- Only national chain drugstore in Alexander City, next nearest Walgreens or CVS over 13 miles away.
- 14+ years of term remaining on an absolute net lease with eleven 5-year options to extend.
- Approx. 13 yrs. of term remaining before 10 (5-year) options, double net lease, landlord responsible for parking only.
- The lease allows for five percent (5%) rental increases in each of the ten (five-year) options.
- The lease structure for this asset does not include a rent holiday.
- Subject property is located in a two-mile radius of three different hospitals.
- Located in a retail hub with approximately 1.8 million square feet of retail space.
- 50 miles north of Tampa along at the central coast Gulf of Mexico.
- Five mile radius population is 82,480 and household income is $60.598.
- One of only Ā±400 Walgreens locations with an in-store healthcare clinic.
- Directly across the street from CVS making this a strategic location for both Walgreens and CVS.
- Surrounded by residential neighborhoods and located at Exit 246 of Interstate 10 Ā±12 miles northwest of downtown Tucson. Average household income is $90,069 in a three-mile radius and $83,659 in a five-mile radius and 281,588 in a ten-mile radius.
- High traffic count of 63,111 cars per day and located 3 miles from Highway 99 with approximately 137,000 cars per day.
- Wells Fargo subleases a portion of the space on an absolute net lease basis for an opportunity of supplemental income.
- Average HH income in a 1-mile radius is $79,529, in a 3-mile radius it is $83,335 and $77,942 in a 5-mile radius with a population of 251,698 in a five-mile radius.
- Located blocks from the Medical District of Memphis with four major hospitals totaling approximately 6.5 million square feet of medical space within a three mile radius.
- Located 2.5 miles outside of downtown Memphis and is part of the Memphis MSA with a population of over 1,340,000 residents.
- Across the street from a Kroger shopping center and near I-69 with traffic counts of over 124,706 VPD.
