Hi, my name is Alex Casablanca, Managing Broker at Casablanca Triple Net Lease Advisors. We are a boutique brokerage firm based in Orlando, Florida specializing in selling NNN Investment Properties Nationwide USA. We are a boutique brokerage firm based in Orlando, Florida specializing in representing Buyers, Sellers, and 1031 Exchange Investors nationwide USA.
In this article, you will learn How to Buy a Walgreens NNN Property. Investing in a Walgreens NNN property offers singular benefits to investors who are looking to invest their hard-earned money in one of the most recognized companies in the world. Most Walgreens leases feature an original lease term of 15 Year Absolute NNN Lease with No Landlord Responsibilities. In addition, most leases are Corporate Guaranteed by Walgreens Corporation. A Walgreens NNN property is an excellent option for your 1031 Exchange replacement property.
Walgreens was founded in Chicago back in 1901 and it has over 125 years of successful operation, which means that it has remained in business through major economic crises across decades and generations. Walgreens operates over 9,000 drugstores in the US with a presence in all 50 states, the District of Columbia and Puerto Rico.
Now the question is, but How to Buy a Walgreens NNN Property? Here are the 10 simple steps on How to Buy a Walgreens NNN Property:
1. First, hire a competent and experienced NNN Buyer’s Broker with access to on and off-the-market Walgreens NNN Properties for Sale.
It is very important that you team up early in the process with a competent and experienced NNN Buyer’s Broker who can represent your interests exclusively and can assist you in searching and evaluating properties, and at the same time help you navigating the complexities of the market. Second, Hire a competent and experienced Real Estate Attorney with previous experience with NNN transactions. Once we get your offer accepted, your attorney should be ready to review the purchase agreement, the lease, and the due diligence documents.
2. Define your acquisition criteria
Your acquisition criteria will be a determinant in the success of your transaction. Your investment criteria is comprised of several important key elements, such as: your Price Range, Cap Rate Expectations, Risk Tolerance, Target Locations, Tenants of Interest, Years Remaining on the Lease, and Lease Guarantor, among others. It is very important that you have clearly defined investment criteria.
3. Define your price range
Before venturing into looking for a Walgreens you should define first your price target. The average price of a Walgreens NNN property is between $4M – $6M, although some of them might be at a higher price depending on the area and the location. The better the area, the higher the price will be. In the current high-interest rate environment, most Walgreens transactions are all cash since financing in most cases is unsustainable.
4. Define the target location or locations that you are interested in
Most investors prefer tax-free states such as FL and TX because their rental income will not be subject to state taxes. It is important to keep in mind that the best property is not necessarily the one that is in your home state or closer to where you live. The best investment property is the one with the strongest real estate fundamentals and the best location.
5. Define your risk appetite and cap rate expectations
Walgreens is considered a low risk investment, therefore cap rates are going to be lower than other types of Tenants. The average cap rate for a Walgreens with a 15-year lease is between 5%-5.50%, so it is important to determine if your cap rate expectations are in line with a Walgreens investment. On the contrary, the cap rate for a Walgreens with 5 or fewer years remaining on the lease would be in the 6% and above. The lower the years remaining on the lease, the higher the cap rate will be. If you are a conservative investor you might prefer to buy a Walgreens with 15 years remaining on the lease at the market average cap rate. On the contrary, if you are a more aggressive investor that is looking for higher cap rates then you could consider buying a Walgreens with fewer years remaining on the lease.
6. Start Looking for Properties that are in line with your investment criteria
As your Buyer’s Broker, we will do that job for you. We will assist you with market research, property evaluation, and selection, offer submissions and negotiations, due diligence, and closing. We work quickly and decisively towards finding for your consideration as many properties as possible within your criteria.
7. Start submitting Offers for the property or properties that most closely match your criteria
As your Buyer’s broker, we will do that job on your behalf as well. Once you decide on the price that you want to offer, we put together a Letter of Intent for your signature, then we will submit it to the Seller and will negotiate the offer on your behalf of you.
8. Have your #1 property selection under contract
Once your offer is accepted, the Seller will provide a draft of the Purchase Agreement, your attorney will review it and negotiate the final language with the Seller’s attorney, then you will be ready to sign the agreement and secure the property under contract. It is very important to keep in mind that the only way to secure a property is by having it under contract. Having an offer accepted does not constitute an obligation to buy or to sell.
9. Review the Due Diligence Documents
The due diligence period in a NNN transaction is usually 21 or 30 days. Once the Purchase Agreement is signed you will have a due diligence period, or inspection period, to review all relevant information concerning the property. If after evaluating such documents you are not satisfied with the property you can cancel the contract during that period and your escrow deposit will be fully refunded. Once the Purchase Agreement is signed the Seller will provide a package of due diligence documents in his possession that will include: the Lease Agreement and any amendments, the existing title, the survey, environmental and technical studies that are in the Seller’s possession, and any other the document that is relevant to the transaction. Your attorney will have the responsibility to review all the due diligence documents on your behalf and identify any possible areas of concern.
10. Close on your Walgreens NNN Property
Once the due diligence period is complete and you have determined that the property is acceptable to you, you are now ready to close on your transaction. The title agent will circulate copies of the closing statement before closing, you will review it with your attorney and then you will be ready to close.
Although buying a NNN property could be seen as stressful and overwhelming, the key is to start early and hire the key competent professionals to assist you. If you do that, the process can really become really straightforward and stress-free.
At Casablanca, we specialize in representing NNN Buyers and 1031 Exchange Investors nationwide USA that are looking to buy a Walgreens NNN Property. We have the knowledge, expertise and market connections to guide you through a successful closing. We assist you with market research, identifying potential properties, submitting offers and negotiating them, due diligence, up to the closing table. We have helped many NNN Buyers and 1031 Exchange Investors in finding and negotiating the best Walgreens NNN property according to their investment goals and risk tolerance.
Moreover, we represent our Buyer’s for Free since we get paid from the Seller, so you get our expert advice and representation at no additional cost to you. We also Pay for our Buyer’s Closing costs up to a maximum of $10k. This incentive will offset or cover completely the major Buyer’s closing costs expenses such as Title Insurance, Attorney Fees, Recording Fees, among others. We are the Brokers that give you more in exchange for your trust.
If you have any questions feel free to contact me directly at 407-205-7570 or you can also email me at [email protected]. Feel free to call me anytime at your convenience, I’m always available for my clients. Thank you very much for watching this video and I’m looking forward to being your broker in your next Walgreens NNN property acquisition.