At 4.3 percent, cap rate is the lowest ever for a CVS-occupied single-tenant property in the US
IRVINE, Calif., September 3, 2015 – Faris Lee Investments, a leading retail advisory and investment sales firm, has completed the $4.88 million “pre-opening” sale of a new construction, 16,500-square-foot, free-standing CVS/pharmacy property in Vallejo, Calif. The transaction’s cap rate of 4.3 percent is the lowest ever recorded for a single-tenant CVS-occupied property in the United States per CoStar records.
Christopher DePierro and Jeff Conover of Faris Lee Investments represented the seller, Rivers Rock Vallejo, LLC, from Southern California. The buyer, Calipine Corporation from Northern California was in a 1031 exchange and was represented by LemRx Realty Advisors.
Located in San Francisco’s Bay Area, the freestanding building that includes a drive-thru is situated on just over 1.6 acres of land at the southwest corner of Columbus Parkway and Admiral Callaghan in the City of Vallejo. The property is under construction and is part of a new retail project that will also include the first Chick-fil-A and Chipotle restaurants in the city. The tenant signed a new 25-year ground lease and is anticipated to open its doors in October 2015.
“This single-tenant asset sold at a very strong price and record-breaking low cap rate because it offered the buyer all the fundamentals for a secure and stable investment. It has a long-term lease, passive cash flow, a strong Bay Area location, and new construction with a name brand, credit tenant. This is an ideal scenario and therefore investments like this are hotly contested,” said DePierro.
“Another very important component to the transaction relative to the historically low cap rate is that the lease was not guaranteed by CVS corporate, but Longs Drugs Stores of California, Inc., a subsidiary of CVS. The tenant is relocating from an in-line, non drive-thru location in the adjacent center,” he added.
The property is located in the most successful shopping hub serving the cities of Vallejo, Benecia, and American Canyon. It offers direct access to Interstate 80, which sees more than 100,000 vehicles a day and is the main corridor linking Sacramento to the Oakland/Bay Area as well as Napa Valley.
About Faris Lee Investments: Faris Lee Investments is a 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. Cumulatively, Faris Lee’s leadership has been involved in more than $20 billion of transactions. Faris Lee's senior advisors are skilled in disposition and acquisition strategies, asset positioning and valuation, marketing, debt and equity structuring, strategic workout and REO solutions and execution. For more information, visit www.farislee.com.