Faris Lee Investments Brokers Acquisition of a $11.1 Million Walgreens Portfolio for 1031 Investor during the Peak of the Pandemic

Irvine, CA – In a strategic move to preserve capital and source acquisition opportunities with a high-certainty of execution for its client, Faris Lee Investments has brokered the acquisition of two Walgreens in Lake Worth, TX and Tooele, UT.

Shaun Riley and Nick Miller of Faris Lee Investments represented the buyer, a Southern California based private investor. The institutional seller was represented by Brian Pfohl of CBRE. The transaction closed at a blended 5.20% Cap Rate.

Earlier this year, Faris Lee handled the sale of a multi-tenant shopping center for the client. The sale occurred at the onset of the Covid-19 restrictions, which made the search for the upleg portion of the 1031 particularly challenging given how the pandemic has affected retail properties.

“We always take a holistic approach to balancing the goals, objectives, and risk tolerance of the investor” said Shaun Riley. “Our team aligns the real estate opportunities with the investment criteria – and in this case as is with many other clients whom we are currently working with, the client’s objective centered on preservation of capital.”

Located at 6244 Lake Worth Boulevard near the Dallas/Fort Worth Metroplex, the 13,548-square-foot Walgreens sits on a 1.88-acre parcel in a dense retail corridor near Lake Worth Center (Anchors: Albertsons and Dollar Tree), Lake Worth Towne Crossing (Anchors: Target, Hobby Lobby, Ross Dress for Less), Walmart, and Home Depot. Walgreens had executed a new absolute NNN lease with ±15.0 years of initial term remaining. The lease features 5% rent increases every 5 years during the initial term, and in each of the twelve 5-year renewal options.

Located at 188 North Main Street near Salt Lake City, UT, the 14,762-square-foot, Walgreens sits on a 1.90-acre parcel within a primary retail and government corridor. The building is directly across from the Tooele County Health Department, and adjacent to Big 5 Sporting Goods and City Hall. Wells Fargo, Key Bank, and other traffic drivers occupy the opposite corners of the intersection. Walgreens had also executed a new absolute NNN lease with ±15.0 years of initial term remaining and features 5% rent increases every 5 years during the initial term and in each of the twelve 5-year renewal options.

“The Pandemic is creating a seismic shift in the needs of retail property investors currently looking to acquire. Single-tenant assets leased to essential uses are experiencing higher demand due to the reliability of the income stream, ability to finance, and certainty of executing a sale. We are starting to see some Cap Rate compression in this sector of the market” said Shaun Riley.

“The client was originally only considering multi-tenant shopping centers. Considering the market, we advised on focusing almost exclusively on single-tenant investments leased to essential uses as this was the property profile which ensured a highly-certain execution. In addition, our client was able to leverage our lending relationships to secure extremely attractive financing and most importantly close in time to meet the 1031 exchange deadline,” said Nick Miller.

About Faris Lee Investments: Faris Lee Investments is a national leading retail advisory and investment sales firm. The company’s high-level retail investment advisors and sophisticated financing experts develop forward-thinking strategies for all retail acquisitions and dispositions and guide clients through complex transactions. Through its recent strategic affiliation with X-Team Retail Advisors, a nationwide partnership of seasoned retail leasing experts, Faris Lee offers a fully integrated platform with disciplined expertise in landlord leasing, tenant representation, capital markets, and investment sales to maximize value for clients.
For more information, visit www.farislee.com
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