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Oak Street Capital buys another South Florida Walgreens
Chicago private equity firm paid $5M for standalone retail building in Homestead
Less than 10 days after acquiring a Walgreens in Broward County, a Chicago-based real estate firm picked up another store in southwest Miami-Dade.
An entity controlled by Mark Zahr and James Hennessy, managing partners of private equity firm Oak Street Real Estate Capital, paid $5.3 million for the 15,651-square-foot Walgreens at 28801 South Dixie Highway in Homestead.
The seller is Walgreens Company, which bought the site for $2 million in 2005 and completed the stand-alone store three years later, according to property records.
Oak Street, which has roughly $7 billion in assets under management through a series of individual funds, regularly wheels and deals in Walgreens sites as part of its strategy of primarily focusing on acquiring properties net-leased to investment grade-rated tenants.
Last week, the company bought a standalone Walgreens store at 4600 Coconut Creek Parkway in Coconut Creek. Oak Street paid $6.8 million to Walgreens Company for the 17,072-square-foot retail building.
Last year, Oak Street sold a Delray Beach Walgreens for $8.1 million and paid $7.3 million for Walgreens in Oakland Park. Oak Street also completed closings on an estimated $1 billion of real estate that the firm bought from struggling national retailers. Oak Street is leasing the properties back to the retail companies.
The company’s Walgreens buying binge also extends to Central Florida and the Gulf Coast, where Oak Street has paid more than $50 million for a dozen stores since the beginning of the year, according to published reports.
According to a Colliers mid-year report, single-tenant and net-lease properties are a hot asset for private investment firms. “Pricing for single-tenant retail and drug stores is outperforming the broader retail market,” Colliers wrote in its report. “Private capital dominates this segment of the market with nearly 70 percent of buyer activity.”
Other real estate firms bullish on Walgreens properties include SunTrust Equity Funding, which paid a combined $14 million for stores in North Palm Beach and Lauderdale Lakes, and Corporate Partners Capital Group, which scooped up a Walgreens in Boca Raton for $9.1 million.