CVS Pharmacy - Adams Morgan - Washington, DC Trades for $14.5 Million

Urban Retail Properties

Urban Retail Investment transaction Sets Record with $14.5MM in Adams Morgan

Calkain Urban Retail Investment Advisors recently completed the sale of a NNN investment property in Washington, DC. The purchaser, a private 1031 investor, seeking a stable, credit rated, income-producing asset. The sale, closing at over $1,154 per square foot, broke the record previously set by Calkain for a NNN investment sale.

Rick Fernandez, Managing Director of Calkain Urban retail  Investment Advisors, represented the seller in the transaction and Calkain Managing Director, Jerry Burg, represented the buyer on the purchase of the CVS on Columbia Road in Adams Morgan. “The AdamsMorgan CVS is well situated in a grocery anchored, dense, high traffic, urban location within a diverse residential and retail community,” explained Fernandez. “The investor understood that this CVS not only provided a stable income stream backed by a strong credit rated corporate tenant, but also a highly adaptable asset with rock solid generational value,” continued Burg.

The seller reviewed multiple offers from across the country before closing with a private investor who was working with Burg to identify $35MM in NNN investment properties for a 1031 exchange. The transactions closed in the past thirty days.

Calkain Companies is a boutique commercial real estate brokerage firm which specializes in assisting buyers and sellers with single and multi-tenant retail, industrial, hotel and office net leased transactions. While licensed to conduct business in many states, nationally, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast and Northeast United States. Additional information about the firm and listings may be found at www.calkain.com.

Creating a Vibrant Urban Retail Centers in USA

Urban Retail Properties

Urban Retail Development Gaining Momentum 

It has been widely discussed that many big box retailers are making the move from suburban sprawl to the heart of urban centers. This trend had been triggered by a number of factors including strengthened urban demographics, inherent land value and stable demand for staple products - which big box retailers are increasingly featuring. Though it may seem like a tight fit, big box retailers are showing a willingness to adapt and reconfigure in order to enter the urban retail market.

Without question, key urban retail markets such as Washington DC, New York, Chicago, Boston and Miami consistently outperform the secondary  and tertiary markets. This trend has only been exacerbated by the recession and resulting economic turmoil. Prime urban locations have the advantage of strong inherent value in their real estate, increased foot traffic and an easier tenant replacement process. Furthermore, issues such as commute time and city gentrification are attracting an affluent – often young – demographic to these areas. As a result, cap rates in prime urban locations have markedly declined in the past 3-4 years.

Big Box retailers have taken note and are committing to widespread urban development.Wal-Mart has six new sites planned for the Washington DC Metro Area alone. Office Depot has recently opened eight stores (about 1/5th the size of the traditional 25,000 sf) in urban areas, including Hoboken NJ. Best Buy has urban locations in Washington DC, Baltimore, Chicago and New York City. Target has opened stores in Washington DC, Minneapolis, Denver, Chicago, San Francisco and Gaithersburg MD. Even Costco is developing a store in DC. 

This is a major trend and is changing the previous suburban image of Big Box retail. Another important development concerns the expansion of grocery products offered at stores such asWal-Mart and Target. With the recession making customers more value focused and web retail services such as Amazon.com growing more popular, big box retailers have begun to place a higher emphasis on groceries. Unlike entertainment products like TVs, Computers, Games and CDs which consumers are increasingly willing to buy from online sources groceries often require a human to visit a bricks and mortar store. 

Furthermore, groceries and other staple products have inherently stable demand, making them essentially recession proof. Intact, Wal-Mart has developed a new concept Wal-Mart Express with a much smaller footprint and healthy offering of grocery/staple products. These new stores are specifically targeting both rural and urban areas. By placing a focus on these items, big box retailers are hoping to take out a new lease on life. 

www.calkain.com