Advisory: Just a year ago, new Walgreens offers 7.25-7.5% cap. Today they offer 6.5-7% cap. So the cap rate has gone down between .5%-.75% for new Walgreens. The cap rate for Walgreens with a new 20-25 yrs is indicative of the cap rate trend for commercial properties. Transmercial believes the cap rate will continue to come down further in the near future.
1. Shopping Center in San Jose, CA: 31,408 SF shopping center on the ground floor as part of 22-story mixed-used tower with 197 luxury condos completed in 2008 in downtown San Jose. 77% leased to Safeway. NOI $834K/yr. $12.84M. 6.5% cap.
2. Retail center in Burnsville, MN: 6758 SF retail center across from 1.1M SF Burnsville Center Mall in middle class Minneapolis suburbs. 100% NNN lease to Vitamin Shoppe (NYSE: MSI) and Wedding Day Diamonds. NOI $194K/yr. $2.427M. 8% cap.
3. Burger King in Rogers, AR: 3621 SF restaurant on .95 acres corner lot in Bentonville metro (Wal-mart Headquarters). Store with strong sales of $1.89M in 2009. New 20 yrs absolute NNN lease to an operator with 9 locations. NOI $144K/yr. with 1.5% annual rent bump. $1.6M. 9% cap.
4. Strip Mall in Placentia, CA: 5370 SF strip center on .39 acres lot in densely-populated area in Orange county with easy access to hwy 57. 100% leased to 2 tenants. Just $1.005M. 10.5% cap.
5. Apartments in Melbourne, FL: 143-unit apartments on 6.43 acres lot next to Florida Institute of Technology. 77% occupied. Pro forma NOI $348K/yr. $3.5M. 9.95% cap.
6. Medical Office Building in Town and Country, MO: 31,199 SF 2-story class-A medical office building in affluent St Louis’s suburbs (AHI $145K/yr in 1 mile ring). Less than 1 mile from Saint Luke’s Hospital. 95% leased. NOI $408K/yr. $4.54M. 9% cap.
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