Predictable revenue from national tenant drives quick $6.6M sale
Courtesy / Horvath & Tremblay
In Gray, a 14,673-square-foot retail store, formerly a Rite Aid and now a Walgreens, sold to an investor who splits her time between Maine and New York.
A commercial property with a long-term national tenant was determined to be an excellent buy for an investor seeking a low-maintenance hold for a 1031 exchange.
Dakota Bear Properties LLC bought 62 West Gray Road in Gray from GRAYRA LLC for $6.6 million.
John Doyon of Malone Commercial Brokers represented the buyer and Lynnfield, Mass., real estate brokerage firm Horvath & Tremblay represented the seller in the transaction, which closed Oct. 22.
Built in 2008, the property comprises a 14,673-square-foot retail store with a drive-through on 2.83 acres. It’s located just off Exit 63 on I-95 at the junction of Route 202 in Gray.
A former Rite Aid, it was acquired by Walgreens Boots Alliance (Nasdaq: WBA) and is now a Walgreens, according to Horvath & Tremblay’s marketing materials.
Horvath & Tremblay marketed it as a passive real estate investment with a triple-net lease requiring zero management responsibilities.
A triple net lease requires the tenant or lessee to pay all real estate taxes, building insurance, and maintenance on the property in addition to normal fees such as rent and utilities.
Strategic location
The site is considered a strategic retail location, attracting area residents, travelers on I-95 and visitors from the Lakes Region.
Horvath & Tremblay specializes in investment retail assets throughout the nation, said Robert Horvath, one of the agents on the deal. In Maine, the firm averages 10 deals per year.
The seller, GRAYRA LLC, was one of the original developers, he said. The property is in good condition.
“We had a lot of interest,” he said. “It was on the market maybe three months. These things tend to move pretty quickly” due to the predictable revenue stream coming from a high-quality tenant.
Single-tenant search
The buyer, Dakota Bear Properties LLC, came to the purchase after selling another Maine property.
In July, Dakota Bear Properties sold a 8,674-square-foot freestanding strip center at 127 Topsham Fair Mall Road in Topsham for $1.615 million.
At the same time, Dakota Bear Properties also sold a lodge in western Maine, Doyon said.
The sales and the acquisition were two sides of an exchange under section 1031 of the IRS tax code.
A 1031 exchange allows an investor to defer paying capital gains taxes on the sale of real estate by buying a similar property.
The search process took several months, he said.
“It took a while,” he said. “There were about four Walgreens available in Maine and New Hampshire, and around six other single-tenant properties available in Maine. Some were in very small towns, and some quite a ways north of here. The goal was to be centered in southern Maine or southern New Hampshire.”
His client splits her time between Maine and New York and was looking for a single-tenant investment property that could more easily be managed from New York, he explained.
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