ValueXpress has arranged a $20-million CMBS conduit loan for the refinance of five free-standing drugstores. Two of the stores are Walgreens located in Guaynabo and Carolina, Puerto Rico. Two of the stores are Rite Aid located in Michigan, one in Selby Township and the other in Coldwater. The fifth property, located in Georgia, was formerly an Eckerd store that subleased to La-z-Boy furniture store.
The Walgreens stores have 20 years remaining on their leases with options to extend for another 20 years. The Rite Aid and La-z-Boy leases are set to expire in 12 years.
“One of the main issues for this transaction was the lack of reported sales for all locations,” commented Gary Unkel, the deal manager for ValueXpress on the transaction. “Rite-Aid refused to supply any sales figures and Walgreens only reported sales on merchandise, food and non-third-party prescription sales.”
Another issue arose in Michigan, as the two Rite Aid stores were directly across the street from a new free-standing Walgreens. The concern here was if the acquisition of Rite Aid by Walgreens went through, would these stores remain open? The appraiser for the Michigan properties confirmed that both the Rite Aid stores are in prime locations on a major four-corner intersection and had great lease-up potential should they close.