Stan Johnson Company closed the sale of a zero-cash-flow portfolio fully leased to CVS Pharmacy. The four-building, four-state portfolio of retail drugstores totaled more than 56,000 square feet and sold to a private 1031 exchange investor for about $19.2 million.
Stan Johnson Company’s Josh Pardue and Zach Pool represented the seller, a leading New York City developer.
“We are pleased to have completed a challenging, cross-border CVS portfolio transaction between our New York-based client and an investment fund from Mexico that has deployed significant capital into the net lease sector in recent years,” said Pardue, Senior Director in Stan Johnson Company’s New York City office.
“With zero-cash-flow transactions, the motivations are different than the drivers of traditional net lease transactions. In these transactions, the buyer’s investment focus is typically on wealth preservation and tax strategy, while the seller is traditionally focused on high-yield development, seeking to roll the equity into income-producing real estate,” Pardue said.
The properties were built between 2011 and 2013 with absolute triple net leases in place. The assets featured non-recourse, zero-cash-flow structured financing that was readily assumable. The following properties were included in the sale:
12751 Nicollet Avenue, Burnsville, Minnesota
400 South Truman Boulevard, Crystal City, Missouri
101 East Hall of Fame Avenue, Stillwater, Oklahoma
2115 Union Avenue, Memphis, Tennessee
“We structured this transaction with a longer contract to allow the seller to secure a quality South Florida multifamily investment property to exchange into,” Pardue added. “We’re pleased to have navigated the nuances between each drastically different investor, accommodating the requirements of all parties and successfully closing on this transaction.”
