Silicon Valley Walgreens Brings $10 Million

This sale is the upleg in a 1031 exchange.

SUNNYVALE, Calif., May 1, 2012 – Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has arranged the sale of a 14,820-square foot Walgreens drugstore in Sunnyvale as part of a 1031 exchange. The $10,050,000 sales price equates to $678 per square foot.
Thomas Doglio, a vice president investments in Palo Alto, represented the buyer, a Silicon Valley apartment owner.
“This Walgreens provides the new owner with a high-quality asset in a superb location and completes the 1031 exchange requirements,” says Doglio. “About 30 days prior to the sale, we sold the relinquished property or downleg of the exchange, which was a 37-unit apartment complex in Burlingame, Calif.”
“The completion of this exchange demonstrates Marcus & Millichap’s ability to secure suitable high-quality 1031 exchange properties for our Silicon Valley multifamily property sellers. In this case, we secured a premium location within 20 miles of the relinquished property,” adds Doglio.
The freestanding drugstore with a drive-through window was built in 2008 on 1.5 acres at 780 East El Camino Real in Sunnyvale. El Camino Real is a major commercial thoroughfare with high traffic counts running through the heart of Silicon Valley.
“This Walgreens has a 75-year triple-net lease with 22 years remaining within its initial term and 10 percent rental escalations every 10 years,” continues Doglio. “The transaction was financed with a coterminous 22-year loan with 4.5 percent fixed interest rate. The buyer will own the property free and clear upon termination of its initial lease term. The combination of a long remaining lease term, superb location and the outstanding credit strength of the tenant makes this a very safe deal for our client,” says Doglio.
Walgreens is one of the top retailers in the nation with a Standard & Poor’s credit rating of A+.

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With more than 1,000 investment professionals in offices nationwide, Marcus & Millichap Real Estate Investment Services is the largest firm specializing in commercial real estate investment services in the nation. Marcus & Millichap closed 5,085 transactions in 2011, the highest of any commercial real estate brokerage firm. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology and relationships with the largest pool of qualified investors nationally.

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