Walgreens is on a South Florida selling spree, shedding more than a half dozen stores since December for a combined $64.3 million. But don’t expect any to close. The national retailer signed five-year leaseback deals with different buyers for each.
Most recently, the drugstore chain sold a Walgreens at 791 Northeast 167th Street in North Miami Beach. An entity managed by Lionel Simon in Beverly Hills paid $9.3 million for the standalone store, and obtained a $2.6 million loan from First Savings Bank, according to records and Vizzda.
In 1991, Walgreens paid $1.6 million for the 1.37-acre site, and completed the 17,325-square-foot one-story building one year later, records show.
“They have quite a few more for sale, and not just in South Florida,” said Simon, who is part of a real estate investment group. “It seemed like a good and safe investment. We are looking at acquiring more in the future if the opportunity provides itself.”
The investment group is targeting Florida. “We figured Florida is where people are comfortable [moving to] when they get older because the weather is friendlier,” Simon said. “And it’s a growing market. This store places in the top 14 percent of all Walgreens across the U.S.”
Since Walgreens CEO Rosalind Brewer took over more than a year ago, the publicly traded company has sought to diversify its business. Walgreens recently doubled its stake in VillageMD, a chain of primary care clinics, as part of a plan to attach them to the bread-and-butter drugstores, according to the Wall Street Journal.
A Walgreens spokesperson did not respond to a request for comment.
Shedding some of its more profitable stores in its real estate portfolio allows Walgreens to raise capital. Yet it can still maintain its market share in areas with a high amount of foot traffic by leasing back the properties.
“It seems like they are about to undergo an expansion,” Simon said. “Walgreens has grown quite a bit already.”
In a deal that closed last month, Orion Real Estate Group – a Miami-based commercial real estate investment firm led by president Kevin Sanz – paid $7.8 million for 17,227-square-foot Walgreens at 13698 Southwest Eighth Street in unincorporated Miami-Dade County, according to records and Vizzda.
Walgreens paid $5.1 million for the 2.5-acre property in 2000, the same year the one-story building was completed, records show.
In February, Walgreens sold two stores in Broward County. In one of the deals, entities managed by Allen and Elaine Singer paid $7.2 million for a 16,921-square-foot Walgreens at 181 North University Drive in Plantation. In 2005, Walgreens acquired the property for $2.9 million, and completed the one-story store three years later, records show.
In the other deal, in Weston, an entity managed by George Manolacidis and Betty Parker Manolacidis of Hollywood bought a 16,714-square-foot Walgreens for $6 million. The one-story building on 1.8-acres was completed in 1997, and Walgreens bought the property for $4.2 million in 2008, records show.
And in December, Walgreens sold a trio of stores in Miami, Boca Raton and Jupiter for a combined $34 million.