Apple Valley Dark Walgreens’ lease selling for $4.45 Million

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Photo credit: Pharma Property Group

APPLE VALLEY – A dark Walgreens’ net lease is available for purchase at $4.45 million. The absolute net lease agreement allows the owner to collect $10,727 cash flow per month while Walgreens is responsible for all property related expenses including the rent, taxes, insurance, and building maintenance.

Walgreens

According to Statista, in 2020 Walgreens registered net sales of approximately $140 billion through its retail and pharmacy business in the United States, international retail, and wholesale operations. That said, the majority of sales is attributed to retail and pharmacy sales in the US. Walgreens pharmacies net sales for the US reached $80.5 billion in 2020.

Although the Apple Valley Walgreens is no longer in operation, the lease agreement remains in effect, and Walgreens is obligated to pay rent for the remaining term of the lease.

“The store is dark and no longer in operation but will produce $2,000,000 of income over the remaining 6.5 years of lease term. Rental income is guaranteed by Walgreens corporate (S&P BBB-) investment grade Fortune 500 Company with over 9,200 locations,” says the description on the real estate listing

The sale of the Walgreens, located at 20250 CA-18, Apple Valley, does not include the business. The acquisition is for an absolute triple net lease. 

Absolute Net Lease

Absolute net leases require no landlord responsibility for expenses, making them attractive to investors who desire a passive income stream. Other expense structures require the landlord to pay for some or all the building expenses. Absolute net leases require the tenant to pay these expenses directly.

RELATED: Apple Valley Bank of America net lease selling for $3.9 Million

According to the listing real estate company Pharma Property Group, the Walgreens lot size is 61,855 square feet and is located across the street from a Target, Walmart, Albertsons, Starbucks, Chase Bank, and Ross Dress for Less. There are 6.5 years left on the lease agreement with 10 five year options remaining. 

The cap rate for the investment is 7.28%.

A lower cap rate is generally associated with a safer or less-risky investment. A higher cap rate is associated with more risk. Many financial advisors feel that a high cap rate is better — a good cap rate is between 5% and 10%.

The listing says a buyer can purchase the property free and clear of debt or by a debt assumption. The current loan has an interest rate of 4.53% and a monthly payment of $16,273 giving a buyer $10,727 cash flow per month not including principal paydown. The loan comes due July 28, 2029 and will have a balance of $2,587,920 at maturity.

The property has been on the market for 647 days.

For more information about the Walgreens  net lease for sale visit
https://www.crexi.com/properties/637747/california-dark-walgreens-southern-california-abs-net-720-cap-8-yrs

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