Newly Constructed NoCal CVS Property Trades at 4.3% Cap Rate

NoCal-based Calipine Corporation paid $4.88 mil in a “pre-opening” purchase of a newly constructed, 16.5k sf, free-standing CVS/pharmacy property in Vallejo, CA. The transaction’s cap rate of 4.3 percent is said to be lowest ever recorded for a single-tenant CVS-occupied property in the United States according to CoStar. 

Located in San Francisco’s Bay Area, the property includes a drive-thru and is situated on just over 1.6 acres of land at the southwest corner of Columbus Pkwy 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. 

The property is located in the most successful shopping hub serving the cities of Vallejo, Benecia, and American Canyon. It offers direct access to I-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. 

Christopher DePierro and Jeff Conover of Faris Lee Investments represented the seller, Rivers Rock Vallejo LLC, from Southern California. The 1031 exchange buyer buyer was repped by LemRx Realty Advisors. 

“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,” noted 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.


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