Marcus & Millichap Closes Large Walgreens Portfolio

An eight-property Walgreens portfolio has changed hands in a $44.33 million deal secured by Marcus & Millichap.
Dean Zang of Marcus & Millichap

Dean Zang of Marcus & Millichap

AtlantaMarcus & Millichap has recently closed a major retail deal across five different states.

The $44.3 million deal included eight Walgreens locations: four in Texas and four in Illinois, New York, Ohio and South Carolina. Russell Malayery of Marcus & Millichap’s Net Leased Properties Group, together with associates Drew Hines and Walter Chapman in the firm’s Atlanta office, represented the seller, a private investor.

“The properties are all freestanding, triple net-leased assets in very strong markets,” Malayery said in a statement. “The primary terms of all the leases have between 14 and 16 years remaining and 10 five-year option renewals, or in one case, 50 one-year options to renew.”

The buyer, also an undisclosed private investor, was procured by Mark Taylor of the firm’s Philadelphia office and Dean Zang of the firm’s Washington, D.C. office, both Marcus & Millichap vice presidents of investments.

“Drugstores are still the stalwart of the net-leased investment property sector, valued for their bullish secular trends and robust credit backing,” Taylor explained. “The low-risk nature of drugstore leases will continue to draw investor interest, particularly as market participants rebalance their portfolios.”

Matthew Rosenberg, a director of Marcus & Millichap’s Philadelphia capital markets group, secured $14 million in financing for four of the properties in the portfolio. The ten-year, nonrecourse, fixed-term debt was structured with no prepay, 4.125 percent interest, 25-year amortization, and a 70 percent loan-to-value.

Marcus & Millichap’s brokers of record for this transaction included Timothy Speck in Texas, John Przybyla in Illinois, J.D. Parker in New York, Michael Glass in Ohio and Raj Ravi in South Carolina.

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