Photo / Courtesy SVN Masiello
Brian Dano
Updated: July 22, 2024
With Walgreens as long-term tenant, Portland building is sold to NY investor for $6.25M
Photo / Courtesy SVN Masiello
A retail property leased to Walgreens at 616 Forest Ave. in Portland sold for $6.25 million.
A retail property leased to Walgreens in Portland that was on the market for a little over a year recently found a buyer who considered it a good investment.
Cam Kenmar 3 LLC bought 616 Forest Ave. from Riverwood Commercial Properties Inc. for $6.25 million.
Chris Pascucci and Brian Dano of SVN Masiello completed the transaction.
“The buyer was an investor from New York who was familiar with the Portland market and liked the location,” said Dano. “He will continue to use it as an investment tool for future generations.”
The property includes a freestanding 13,413-square-foot Walgreens store, built in 2010, with a drive-through, loading dock and 55 parking spaces. It was marketed as being in an ideal location with excellent frontage on Forest Avenue; located in a well-established neighborhood; and advantageously positioned with four points of ingress/egress, ample parking, and visibility to over 16,015 vehicles per day.
The retail building has a 10-year lease remaining with the national tenant.
The seller, Riverwood Commercial Properties Inc., built the Walgreens to add to their investment portfolio, said Dano.
“They wanted to maximize the returns to themselves and the timing was right” to sell, he said. “With ten years left on the lease, it was at its highest value.”
The property remained on the market a little over a year.
“The problem with it was that we were chasing interest rates but the cap rates kept increasing during the time it was for sale,” he said.
Photo / Courtesy SVN Masiello
Chris Pascucci
“Capitalization rate” refers to the rate of return on a property investment, based on the income it’s expected to generate. Higher cap rates reflect a higher return but also a riskier investment, based on considerations such as the property location, condition and higher interest rates, according to J.P. Morgan.
The listing received lots of interest as a 1031 investment opportunity.
“We had interest from Southern California up to Washington state all the way down to Florida,” said Dano.
The 1031 is a “like-kind,” real estate exchange. The tax benefit, named after its IRS section code, allows an investor to put off capital gains tax from a sale by investing the money into a similar property.
The Walgreens chain is experiencing some flux. Earlier this summer, Walgreens said it is "finalizing an optimization program that we expect will include closing a significant portion" of its under-performing stores over the next three years.
Walgreens operates 12,500 stores worldwide and nearly 9,000 in the U.S. The chain is a subsidiary of Walgreens Boots Alliance, which announced June 27 third-quarter earnings of $344 million, up from $118 million a year earlier.
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