Thomas Company Negotiates Sale of 47-Property CVS Portfolio
Thomas Company is pleased to announce the completed individual sales of a 47-property CVS portfolio. The properties were offered as highly leveraged zero-cash-flow investments, with attractively priced loans on each property that will fully-amortize prior to the expiration of each lease. Each property is leased on a bondable triple-net basis, with CVS responsible for all repair and maintenance.
All stores are recently constructed or have been recently renovated and are located throughout the U.S in 22 states. Combined, the properties total more than 571,465 square feet of retail space. The credit of CVS and the fully amortizing nature of the loans allowed lenders to underwrite the assets with much higher leverage ratios than typical real estate investments. The high amount of leverage required far less equity to be invested and generate annual passive losses that work to offset taxable income from other investments.
As of March 2022, CVS operated over 9,900 retail locations in the United States, Puerto Rico, and Brazil. Its stores sell prescription drugs and front- end products such as non-prescription medications, health and beauty aids, and cosmetics. The company also operates the nation’s largest chain of health care clinics, with 1,100 MinuteClinic outlets throughout the country. MinuteClinics are staffed by nurse practitioners and physician assistants who utilize nationally recognized protocols to diagnose and treat minor health conditions, perform health screenings, monitor chronic conditions, and deliver vaccinations.
Recently Sold - Global Payments, Salt Lake City MSA
Thomas Company is pleased to announce the closing of a Global Payments Class-A office located in South Jordan (Salt Lake City MSA), Utah. Located in the Jordan Valley Tech Center, the five-story office building totals 106,083 square feet and is occupied by Global Payments subsidiary AdvancedMD, which provides cloud-based enterprise solutions for physician offices in the US.
Located in the South Jordan/Sandy submarket, one of Utah’s fastest growing areas, the Property is 17 minutes directly south of downtown Salt Lake City and 21 minutes from the Salt Lake City International Airport. Known as the “Gateway to Silicon Slopes” the area is recognized as a high-technology business cluster with a politically supportive environment for entrepreneurship and business. Over the last several years, the US Census Bureau has reported South Jordan City in the top-10 fastest growing cities in the nation.
Recently Sold - CVS Pharmacy Leasehold
Thomas Company is pleased to announce the closing of a CVS Pharmacy leasehold located in Clinton, Connecticut. The property recently opened in 2019 and totals over 13,000 SF in size.
The property was offered free and clear of debt, allowing investors to purchase on an all-cash basis. The asset was structured with an absolute triple-net bondable lease with no landlord responsibilities.
Key Highlights
- CVS Health Corporation (S&P: BBB, NYSE: CVS), together with its subsidiaries, is one of the largest pharmacy health providers in the United States, operating more than 9,900 retail drugstores in the United States, Puerto Rico, and Brazil.
- The properties is situated in an established location along high traffic roadways. In addition, the property benefits from excellent demographics with strong household income and a mature population.
- The property is subject to an absolute NNN lease where the tenant has responsibility for all repair and maintenance of the Property, and the Landlord has no responsibility.
Q1 2022 Closings
Thomas Company is pleased to announce the closing of 12 single tenant net lease properties in 10 states during the first quarter of 2022. The properties collectively sold for over $160M and totaled over 435,000 square feet. We would like to thank our clients for the privilege of working with them and look forward to many more successful disposition assignments.
Highlights
ProHealth Care, Inc. | Asking Price: $23.9M
A Class-A 112,000 SF Office Headquarters located in Waukesha, Wisconsin and leased to ProHealth Care, Inc. on a long-term basis.
Intuit | Asking Price: $52.5M
A Class-A 130,000 SF Office Campus located in Boise, Idaho and leased to software company Intuit (NASDAQ: INTU, S&P: A-) on a long-term basis.
Gateway First Bank | Asking Price: $33.3M
A Class-A 87,000 SF Office Headquarters located in Tulsa, Oklahoma and leased to Gateway First Bank on a long-term basis.
Recently Sold - CVS Pharmacy, Zapata, TX
Thomas Company is pleased to announce the recent sale of a CVS Pharmacy located in Zapata, Texas. The asset was structured with long-term fixed-rate CTL financing. The transaction underscores the market’s ongoing demand for zero-cash-flow product. The buyer was attracted to the flexible nature of the investment structure to fulfill their specific exchange constraints and the easily assumable financing.
Key Highlights
- ZERO-CASH-FLOW STRUCTURE: Long-term, easily assumable, fixed-rate CTL financing.
- MANAGEMENT-FREE OWNERSHIP: The Tenant has executed a 25-year bondable net lease (NNNN) with no Landlord responsibilities whatsoever. The Tenant is responsible for all management and maintenance of the asset.
- PASSIVE LOSSES: The property provides the owner with significant passive losses (depreciation and interest expense) to help offset unsheltered cash flow from other real estate investments.
Recently Sold - Intuit Office Campus
Thomas Company is pleased to announce the recent sale of a Class-A Office Campus leased to software company Intuit (NASDAQ: INTU, S&P: A-) on a long-term basis. The campus is located approximately 10 miles northwest of downtown Boise in Eagle, Idaho – an affluent Boise suburb and one of the fastest-growing submarkets of the Boise MSA. With its blossoming population, Eagle has seen the formation of new communities and new custom-built housing. Eagle also boasts one of the lowest vacancy rates in the Boise MSA for commercial office property.
The purchaser owns several other similar assets and was in a 1031 exchange and motivated by the opportunity to acquire a core-quality asset for a long-term hold.
Highlights
- Tenant Site Commitment Demonstrated by Campus Expansion
- Robust High-Growth Boise Market
- Brand New World-Class Construction
- Premier Investment-Grade Credit
- Attractive Annual Rent Increases
Recently Sold - Gateway First Bank Office Headquarters
Thomas Company is pleased to announce the recent sale of a Class-A Office Headquarters leased to Gateway First Bank on a long-term basis. The Property serves as Gateway’s corporate headquarters, housing its executive offices, administrative department, loan servicing for both the bank and mortgage divisions, human resources, retail banking, risk management, and technology department.
Gateway is a Tulsa, Oklahoma-based financial institution that provides banking and mortgage services for individual and commercial customers. Established in 2000 as Gateway Mortgage Group, the company has grown to more than 1,600 employees with operations in 43 states, including 165 mortgage centers. In 2020, Gateway reported total assets of approximately $2.19 billion and net income of approximately $107 million. Gateway First Bank was formed as the result of a merger between Gateway Mortgage Group and Farmers Exchange Bank in 2019.
The property closed as an off-market transaction.
Highlights
- Long-Term Passive Ownership
- Mission-Critical Facility
- Strong Private Credit
- Attractive Rent Increases
Recently Sold - Off-Market CVS, Portfolio
Thomas Company is pleased to announce the recent sale of a four-property CVS retail portfolio – locations in Whitehall, PA, North Reading, MA, Mt. Pleasant, SC and Hardeeville, SC. The portfolio totaled approximately 49,400 square feet. The transaction was for the leasehold interest, meaning only the building’s improvements were sold. The long-term in-place leases and investment-grade credit of the tenant allowed the buyer to create an attractive debt product. This allowed the buyer to maximize LTV, replace a significant amount of debt from their exchange, while generating a higher yield than on a fee simple acquisition.
Highlights
- MANAGEMENT-FREE OWNERSHIP: The Tenant recently executed 19-year absolute net leases (NNN) with no Landlord responsibilities whatsoever. The Tenant is responsible for all management and maintenance of the asset.
- LEASEHOLD INTEREST: The transaction was for the leasehold interest only, allowing the buyer to depreciate 100% of their cost basis.
Recently Sold - ProHealth Care, INC. HQ
Thomas Company is pleased to announce the recent sale of a Class-A Office Headquarters leased to ProHealth Care, Inc. on a long-term basis. The 112,000-SF building features a spacious lobby with 12-foot-high ceilings, several collaborative and meeting areas, a garden-level cafeteria, an executive wing, an 18-inch raised floor data center. The tenant had recently signed a long-term lease extension.
ProHealth Care, Inc. is the largest health care provider between Milwaukee and Madison. The community-based health care system has approximately 4,700 employees and 1,000 doctors who treat more than 400,000 patients a year. ProHealth Care provides health care services to southeastern Wisconsin through a network of three hospitals (Waukesha Memorial, Oconomowoc Memorial, and the Rehabilitation Hospital of Wisconsin), about 15 clinics, assisted living facilities (Regency Senior Communities), a rehabilitation partnership, home health care services, and a hospice facility.
The property closed as an off-market transaction. The buyer was in a 1031 exchange and Thomas Company sourced the opportunity based on the buyer’s requirements.
Highlights
- Long-Term Passive Ownership
- Investment-Grade Credit
- Annual Rent Increases
- Milwaukee MSA
- Mission-Critical Facility
Recently Sold - CVS Richmond, TX
Thomas Company is pleased to announce the recent sale of a single-tenant CVS in Richmond, TX. The property totaled approximately 14,700 square feet and was listed at $6.2 million. The asset closed escrow just 10 business days after the LOI was submitted. This transaction underscores the straightforward loan assumption process, speed of execution, and surety of closing associated with zero-cash-flow investments. The buyer was attracted to the Houston MSA location, CVS credit, and the flexible nature of the investment structure to fulfill their specific exchange constraints.
Highlights
- ZERO-CASH-FLOW STRUCTURE: Long-term, easily assumable, fixed-rate CTL financing.
- MANAGEMENT-FREE OWNERSHIP: The Tenant has executed a 25-year bondable net lease (NNNN) with no Landlord responsibilities whatsoever. The Tenant is responsible for all management and maintenance of the asset.
- PASSIVE LOSSES: The property provides the owner with significant passive losses (depreciation and interest expense) to help offset unsheltered cash flow from other real estate investments.