WALGREENS | 1798 N. PARHAM ROAD | RICHMOND, VA 23229 FOR SALE
Stuart ScheinholtzTiburon Realty Advisors388 Market Street, Suite 1300San Francisco, CA 94111
(415) 889-5399 (415) 264-9541 [email protected] #00999171
REPRESENTATIVE IMAGE
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Disclaimer 3
Executive Summary 4
Investment Highlights 5
About the Property 6
Property Photos 7
Aerial Map 8
Subject Neighborhood 9
Area Map 10
Site Plan 11
Lease Summary 12
Loan Summary 13
Tenant Overview 14 - 15
About Richmond 16
Demographics 17
INDEX
The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Tiburon Realty Advisors and should not be made available to any other person or entity without the written consent of Tiburon Realty Advisors.
This Offering Memorandum has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation.
The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, Tiburon Realty Advisors has not verified, and will not verify, any of the information contained herein, nor has Tiburon Realty Advisors conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.
DISCLAIMER
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The price of the property is $6,325,099. This amount is equal to 18% over the debt balance of the assumable loan as of January 25, 2018.
Equity requirement is only $964,846. The balance of the purchase price will be paid through assumption of the existing debt.
Paydown readvance available. Loan offers paydown-readvance feature allowing investors to pull out cash on tax-free basis.
Investment grade tenant with long-term lease. Property ownership available with minimal downpayment and no landlord respresponsibilities.
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EXECUTIVE SUMMARY
Tiburon Realty Advisors is pleased to exclusively offer for sale a Walgreens pharmacy with zero cash flow debt financing. This debt is in-place, fully-amortizing and assumable. The price of the property is $6,325,099. The property is located in a busy residential neighborhood in Richmond, Virginia. Richmond is the State Capital of Virginia and its metro area is the third most populous in the State.
The subject property is leased to Walgreens through an absolute triple net lease which is 100% guaranteed by Walgreen Company. There are no Landlord responsibilities whatsoever. The lease has about 19 years remaining of firm term and the tenant’s first option to terminate is December 31, 2036. Such termination requires 12 months written notice. Each lease renewal option is for a period of five years.
ABSOLUTE NET LEASE The lease is absolute net with no landlord responsibilities whatsoever. The tenant is responsible for all taxes, insurance, maintenance, repair and operating costs associated with the property.
NATIONAL TENANT The property is leased by Walgreens Boots Alliance, Inc. (NASDAQ: WBA), an investment grade tenant (S&P: BBB/Stable) with 2016 annual revenues of approximately $117.4 Billion.
EXCELLENT SITE LOCATIONThe property is located at a prominent intersection surrounded by residential neighborhoods in a densely populated community. Walgreens is next door to the U.S. Post Office, McDonald’s and Aldi Grocery. It is a half-mile from Parham Plaza Shopping Center (WalMart), Regency Square Shopping Center and Ridge Shopping Center. There are nearly 94,000 residents located within three miles of the property.
INVESTMENTHIGHLIGHTS
INVESTMENT HIGHLIGHTS
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ZERO CASHFLOW STRUCTURE Zero cashflow structure with readily assumable, non-recourse loan currently in place. This structure is ideal for tax deferred 1031 exchange buyers or traditional investors seeking passive losses that might be used to offset income from other real estate investments. The paydown/readvance feature is available in the assumable loan, allowing a 1031 investor to easily match their debt & equity requirement with an option to extract additional equity through re-finance.
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ABOUT THE PROPERTY
Price: $6,325,099 This includes assumption of the zero cashflow loan which has a balance of $5,360,253 as of 1/25/2018. Equity requirement equals $964,846.
Address: 1798 N. Parham Road, Richmond, VA 23229
County: Henrico, Virginia
Rentable Area: 14,962 SF
Land Area: 1.95 ac.
Year Built: 2011
Parking: There are approximately 75 parking spaces (72 regular & 3 handicapped-accessible)
Access: There are two access points, one along N. Parham Road and another from Three Chopt Road
Zoning: B-2C—Business District (Conditional)
Ownership: Fee simple (Land & Building)
Guaranty: Walgreen Co./ Walgreens Boots Alliance
Tenant: Walgreen Co.
09SUBJECT NEIGHBORHOODThe Walgreens located at 1798 N. Parham Road is in the West End neighborhood of Richmond. The property is about 12 miles northwest of downtown. There are many restaurants, businesses and shopping centers in this area. They are mostly clustered along or near the three major thoroughfares, including Parham Road, where the property is located, which runs north-south. (The others are Broad Street road and Patterson Avenue, which run east-west.) In addition to businesses, the West End is also home to the University of Richmond (over 4,000 students), the Country Club of Virginia (private golf club) and the Virginia Museum of Fine Arts (founded in 1936).
The subject property is located at the intersection of N. Parham Road & Three Chopt Road. There is a McDonald’s and Aldi Grocery Store next door. A branch of the U.S. Post Office is behind the property. This intersection has average traffic of about 30,000 vehicles/ day.
The surrounding area consists primarily of residences with several schools and prominent shopping centers nearby. The Henrico County Public Library, Tuckahoe Middle School and Douglas Southall Freeman High School are all within walking distance of Walgreens. Regency Square Mall, an 820,000 SF shopping center, is about a mile away. This property has recently been slated for a $30 million redevelopment. Other neighboring retailers include WalMart, Staples, Advance Auto Parts, Fresh Market, Panera Bread, BP Gasoline, Wells Fargo Bank and many more. Regency Square Mall
5 MIN DRIVE1.1 MILES
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9,500 VPD
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LEASE SUMMARY
Tenant: Walgreen Company
Annual Rent: $445,002
Rent Commencement: December 28, 2011
Lease Expiration: December 31, 2036
Base Lease Term: 25 years
Base Term Remaining: 19 years
Lease Type: Absolute NNN
Landlord Responsibilities: None
Renewal Options: Ten 5-year options
Building Size: 14,962 SF
Lot Size: 1.95 ac.
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LOAN SUMMARY
Original Loan Balance: $6,240,689
Loan Commencement: December 28, 2011
Lender: Wells Fargo Bank
Current Loan Balance: $5,360,253 (as of 1/25/2018)
Interest Rate: 5.11%
Annual Payment: $442,602
Loan Maturity Date: December 25, 2036
Recourse: Financing is non-recourse to Borrower
Paydown Re-Advance: Borrower has the ability to utilize the paydown/readvance feature as provided in the existing debt
TENANT OVERVIEW
Walgreens (S&P: BBB) headquartered in Deerfield, IL, is the second largest drugstore chain in the U.S., with more than 8,100
stores in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. In addition, the company operates more
than 400 in-store and worksite health and wellness centers that offer immunizations, prevention and wellness programs, as well
as treatments for minor injuries, illnesses and skin conditions, which managing and monitoring ongoing health conditions.
Walgreens provides consumer goods, pharmacy and wellness services through its retail drugstores, direct mail, telephone and
online platforms. The company sells prescription and non-prescription drugs and general merchandise including household
products, convenience and fresh foods, personal care, beauty care, photo finishing, as well as home medical equipment, contact
lenses, vitamins, supplements and other health and wellness solutions. Walgreens also provides specialty pharmacy services for
managing complex and chronic health conditions.
14TENANT OVERVIEW
TENANT OVERVIEW15
TENANT OVERVIEW
WALGREENS CORPORATE SUMMARY
Type:
Industry:
Locations:
Employees:
Revenue:
Corporate Headquarters:
Credit Rating:
Public (NASDAQ: WBA)
Drug, Health & Beauty Stores
8,100
235,000+
$117.4 B (FY 2016)
Deerfield, IL
S&P: BBB; Moody’s Baa2
In December 2014, Walgreens completed its strategic combination with Alliance Boots to establish Walgreens Boots Alliance, Inc. (NASDAQ: WBA), the first global pharmacy-led, health and wellbeing enterprise. The combination brought together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through community pharmacy care and pharmaceutical wholesaling. Both companies have more than a century’s worth of experience in customer and patient care. Today, Walgreens is part of the Retail Pharmacy USA division of Walgreens Boots Alliance.
In fiscal year 2016, Walgreens filled 928 million prescriptions (including immunizations). With stores located within five-miles of approximately 76 percent of Americans, and through popular online offerings and its award-winning mobile app, Walgreens interacts with 10 million customers per day. In fiscal year 2016, Walgreens reported annual revenues of $117.4 billion, which equated to a 13.4% year-over-year increase in annual sales.
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Richmond is the capital of the Commonwealth of Virginia. It is the center of the Richmond Metropolitan Statistical Area (MSA) and the Greater Richmond Region. It was incorporated in 1742, and has been an independent city since 1871.
Richmond’s estimated population in 2016 was 223,170 (fourth highest in the State). The Richmond Metropolitan Area has a population of 1,260,029, making it the third-most populous metro in the State.
Richmond is located at the fall line of the James River, 44 miles (71 km) west of Williamsburg, 66 miles (106 km) east of Charlottesville, and 98 miles (158 km) south of Washington, D.C. Surrounded by Henrico and Chesterfield counties, the city is located at the intersections of Interstate 95 and Interstate 64, and encircled by Interstate 295 and Virginia State Route 288.
Richmond's economy is primarily driven by law, finance, and government, with federal, state, and local governmental agencies, as well as notable legal and banking firms, located in the downtown area. The city is home to both the United States Court of Appeals for the Fourth Circuit, one of 13 United States courts of appeals, and the Federal Reserve Bank of Richmond, one of 12 Federal Reserve Banks.
ABOUT RICHMOND
5 Miles
3 Miles
1 Mile
DEMOGRAPHICS17
2017 SUMMARY
Population
Households
Families
Average Household Size
Owner Occupied Housing Units
Renter Occupied Housing Units
Median Age
Median Household Income
Average Household Income
2022 SUMMARY
Population
Households
Families
Average Household Size
Owner Occupied Housing Units
Renter Occupied Housing Units
Median Age
Median Household Income
Average Household Income
3 MILES
96,652
39,569
23,352
2.35
21,527
18,041
36.8
$64,569
$90,548
3 MILES
99,622
40,761
23,850
2.35
22,118
18,643
37.7
$71,047
$101,45
1 MILE
10,776
4,392
2,700
2.45
2,430
1,962
39.2
$53,176
$66,451
1 MILE
10,992
4,457
2,719
2.47
2,465
1,992
39.9
$55,658
$74,582
5 MILES
203,152
83,133
50,604
2.39
51,466
31,667
38.6
$71,515
$98,766
5 MILES
211,346
86,342
52,199
2.39
53,273
33,069
39.5
$78,241
$111,061