ME Commercial announces its acquisition of a rural Ohio Walgreens location, showing the firm’s commitment to its opportunistic retail acquisition strategies. The purchase, closing in August of 2024, represents the company’s adaptiveness to industry news and whispers in order to acquire prime assets at discount pricing.
Key Benefits of this Acquisition:
- Guaranteed cash flow: Backed by a financially stable corporation that, despite recent and projected closures, remains committed to the market-dominant site.
- Minimal management responsibilities: Walgreens handles or pays all operating expenses, insurance, and property taxes.
- Low risk: Minimal likelihood of default due to location quality, with upside in the event of default. Walgreens remains open and operating at the site, without default.
- Predictable returns: The property’s decades long lease agreement at a fixed rate protects 1031 exchange funds and provides a stable yield for the duration of the hold.
- Local development: Eaton, Ohio and the areas connecting it to the Interstate 70 corridor have seen an uptick in investment from retail, single-family, and multi-family developers due to its excellent access to Cincinnati, Dayton, and Indianapolis markets amid rising housing costs.
Why Walgreens and Why Now?
The acquisition of Walgreens sites by affiliates of ME Commercial represents an opportunistic strategy with minimal downside. Pharmacy retailers such as Rite-Aid, CVS, and Walgreens have made recent national news due to “leaning down” of store counts and square footages, with the emergence of newer drive-through oriented concepts and mail order prescriptions. ME found that, despite waning valuation, Walgreens retains the financial strength to fulfill its commitments at key sites. Walgreens’ reported turbulence has enabled ME Commercial affiliates to acquire well-maintained retail spaces at signalized Main and Main locations at a discount, which provides a desirable return in the event of the tenant’s success and ample upside potential in the event of default. Former pharmacy retail sites across the country have made ideal candidates for medical uses, multi-tenant conversion, and QSR opportunities.
About ME Commercial
ME Commercial is a Columbus, Ohio-based real estate investment and advisory firm with a diverse portfolio of holdings across the United States. The firm specializes in identifying and executing strategic real estate transactions that create value for both its investors and its tenants. ME Commercial regularly pursues both stable and value-add retail opportunities for its investors and clients.
