A pair of low-profile commercial real estate investors from Chicago paid $10.55 million on Monday, all cash, for a triple net-leased Walgreens property at one of Winter Park's busiest intersections.
Located at 550 S. Orlando Ave. on the northeast corner with W. Fairbanks Avenue, the 1.34-acre property lies just outside the city's Martin Luther King Jr. Park, and has been net-leased by Walgreens since 2008 with 16 years remaining on the initial 25-year term.
The buyer was Jahu LLC, which is managed out of Palm Beach Gardens by principals Joseph Simon and Cary Rosen, who are investment partners behind Chicago-based SRE Holdings LLC.
Simon and Rosen have other LLC affiliates which own net-leased retail properties in Greater Orlando, including the McDonald's parcel at 1302 W. Fairbanks Ave. That lies just a block west of the Walgreen's, and is next to a 1.52-acre parcel that Leon Capital Group is trying to rezone for retail redevelopment.
"The draw was location. This is a net-leased investment property with tremendous residual value and a 4- to 5 percent Cap rate, which is highly sought after by passive investors like (my clients)," said Derrick Schroeder, broker with Solid Investments who represented the buyers.
The seller, South Carolina-based Coffee Street Properties LLC, is an affiliate of developer John Cothran of Cothran Properties, who previously paid $7.67 million in November 2010.
"I helped him buy this Walgreen's property in 2010 from GE Capital when the market was ripe. Over the last few years we've done a lot of transactions, and I put in his ear that we could market this for a nice profit," said Brett Chetek, listing broker on the property, who lead's Marcus & Millichap's The Chetek Group out of St. Louis and Miami.
"(Schroeder) delivered an all-cash buyer with no financing, which was very appealing to us, and we had it under contract within 30 days for very close to list price of ($10.95 million)," he continued. "Now Cothran will turn a 1031, buying a Cheddar's property in Hendersonville (Tennessee) on a longer lease, with a higher return."
The appreciation of the property over the past seven years offers a positive outlook for a local group of physicians who had their $3.5 million bid accepted on Monday by city commissioners for a vacant parcel directly east of the Walgreen's.