Walgreens on Lincoln Road hits the market

$78.9M ground lease has 111 years remaining

October 19, 2017 04:30 PM

Diego Lowenstein and The Ritz Carlton (Credit: Lionstone)

Walgreens’ retail space on Lincoln Road just hit the market — as a ground lease priced at $78.9 million.

The 19,000-square-foot retail space at 1 Lincoln Road, at the corner of Collins Avenue, is on the ground floor of the Ritz-Carlton South Beach. The 129-year ground lease has 111 years remaining, according to an offering memorandum from Chicago-based Stream Capital Partners, obtained by The Real Deal. The ground rent is $1 per year and was paid in its entirety, according to the offering.

Stream Capital Partners’ Jordan Shtulman, Jonathan Wolfe and Philip DiGennaro have the listing. “It’s a more complex deal because you’re buying a leasehold interest… You have rights to the commercial space for 111 years,” Shtulman said.

The seller is Di Lido Beach Commercial, led by Diego Lowenstein, CEO of Lionstone Development. Lionstone is the principal owner of the 375-room Ritz-Carlton South Beach, along with New York-based Flag Luxury. Lionstone also owns the Ritz-Carlton Bal Harbour.

Last year, Di Lido Beach closed on $210 million in refinancing for the Ritz-Carlton South Beach. The property, built in 1953, underwent a $200 million restoration in 2003 and another renovation in 2015. The Lowenstein family bought the hotel, formerly the Di Lido, in 1971. No price is available in records.

The tenant at 1 Lincoln Road, Walgreens Boots Alliance, has 23 years remaining on its lease, with 10 5-year options. It pays $189 per square foot triple-net, which is below current market rates, Shtulman said. The lease features a 10 percent rent increase every 10 years, starting June 1, 2025.

Shtulman said he is marketing the retail property to high net worth families around the globe, and has had initial interest from prospective buyers in Asia, South America and the Middle East.

Lincoln Road is set to receive a facelift that will include enlarging sidewalks and planting trees along the pedestrian promenade and enhancing the adjoining streets — all part of the Lincoln Road Master Plan designed by James Corner Field Operations. Nearby, the Miami Beach Convention Center is also undergoing a renovation and an expansion.

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