Walgreens Pharmacy #12067 Orange County, New York • 21+ Year NNN with extremely rare rent increases in primary term • Store is well positioned at a high traffic crossroads known as the “Five Corners” intersection of NY 32 and NY 94; over 30,000 cars per day • Neighboring tenants include: McDonalds, AutoZone, Advance Auto, Dunkin’ Donuts, Wendy’s, Bank of America, First Niagra Bank, and others... • True NNN lease with no management responsibilities • Walgreens corporate, investment grade credit guarantees the rent Deerfield Partners John Giordani Art Griffith (415) 685-3035 team@deerfieldteam.com $11,300,000 5.10% Cap Rate Rent Increases in the Lease! Extremely Rare for Walgreens
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Rent Increases in the Lease! - Deerfield Partners · 2016-05-23 · • True NNN lease with no management responsibilities • Walgreens corporate, investment grade credit guarantees
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Walgreens Pharmacy #12067 Orange County, New York
• 21+ Year NNN with extremely rare rent increases in primary term
• Store is well positioned at a high traffic crossroads known as the “Five Corners” intersection of NY 32 and NY 94; over 30,000 cars per day
• Neighboring tenants include: McDonalds, AutoZone, Advance Auto, Dunkin’ Donuts, Wendy’s, Bank of America, First Niagra Bank, and others...
• True NNN lease with no management responsibilities
• Walgreens corporate, investment grade credit guarantees the rent
This is a rare opportunity for an investor to acquire a Walgreens drugstore property with rent increases scheduled in the lease.While99outof100Walgreens leasesareflat for the lifeof the lease, thisdealprovidesrentincreasesandsomehedgeagainstfutureinflation.Seebelowforthescheduledrentincreases.
Limited Drugstore Competition in Vails GateWith Walgreens pending acquisition of Rite Aid, investors are looking closely at the competitive landscape in each local market prior to making purchase decisions. In this case, an investor can confidently presume that the subject Walgreens will remain open and operating. Looking at the map below, you can see that the subject Walgreens is a superior location to the Rite Aid down the street. In fact, the Rite Aid isn’t even a corner location. We’d expect the Rite Aid to be closed in this market.
About Walgreens Boots AllianceWalgreensBootsAllianceisthefirstglobalpharmacy-led,healthandwellbeingenterpriseintheworld.Our purpose is to help people across the world lead healthier and happier lives. Walgreens Boots Alliance was created through the combination of Walgreens and Alliance Boots in December 2014. This transaction brought together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.
The Company, with a presence in more than 25 countries, employs over 370,000 people and is the largest retail pharmacy, health and daily living destination in the USA and Europe.
The Company’s size, scale, and expertise will help us to expand the supply, and address the rising cost of, prescription drugs in the USA and worldwide.
Byleveragingtheseadvantagesandopportunities,aswellasthefullbenefitofourbestpracticesandexpertise,WalgreensBootsAlliancewillbepositionedtocreatesubstantialincrementalefficiency,synergy and growth opportunities.
The creation of Walgreens Boots Alliance provides an opportunity to further accelerate the development of a fully integrated, global platform for the future to provide innovative ways to address health and wellnesschallenges.OurCompanyiswellpositionedtoexpandcustomerofferingsinexistingmarketsand become the health and wellbeing partner of choice in emerging markets.
Walgreens Boots Alliance -- Retail Pharmacy USA DivisionThe Retail Pharmacy USA Division’s principal retail pharmacy brands are Walgreens and Duane Reade. Together, they form the largest drugstore chain in the USA.
This Division operates 8,240 drugstores in 50 states, the District of Columbia, Puerto Rico and the US VirginIslands.AsofAugust2014,approximately76%ofthepopulationoftheUSAliveswithinfivemilesof a Walgreens.
The company sells prescription and non-prescription drugs, as well as general merchandise, including householditems,convenienceandfreshfoods,personalcare,beautycare,photofinishingandcandy.They provide customers with convenient, omni-channel access to consumer goods and services, pharmacy, and health and wellness services in communities across America.
The company’s websites, which include Walgreens.com and drugstore.com, receive an average of approximately 60 million visits per month. Integrated with an e-commerce platform, the Walgreens mobileapplicationallowscustomerstorefillprescriptionsthroughscantechnology,receivetextmessagesalertingwhenarefillisdueandotherfront-endfunctionality,suchasphotoandshoppingfeatures.
Prescription drugs account for 64 percent of sales, while retail products are 36 percent. Overall, WBA filledapproximately699millionprescriptionsin2014.
3Q15 Financial Performance – Retail Pharmacy USA
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GAAP $ million
3Q15 Financial Performance – Retail Pharmacy USA
Non-GAAP* $ million
* Non-GAAP financial measures – See attached Appendix.
Total Sales $20,425 Gross Profit $5,527 SG&A $4,494 Operating Income $1,033
There are no unresolved written comments that were received from the SEC Staff 180 days or more before theend of our fiscal year relating to our periodic or current reports under the Securities Exchange Act of 1934.
Item 2. Properties
The Company’s locations, including drugstores, infusion and respiratory service facilities, specialty pharmaciesand mail service facilities at August 31, 2014 and 2013 are listed below.
2014 2013 2014 2013 2014 2013
Alabama 115 113 Louisiana 154 152 Oklahoma 117 121Alaska 8 7 Maine 15 15 Oregon 77 80Arizona 250 258 Maryland 89 80 Pennsylvania 131 138Arkansas 83 78 Massachusetts 168 185 Rhode Island 26 29California 646 663 Michigan 232 232 South Carolina 110 119Colorado 160 172 Minnesota 154 164 South Dakota 14 14Connecticut 95 125 Mississippi 78 79 Tennessee 254 271Delaware 65 66 Missouri 219 221 Texas 712 729District of Columbia 6 5 Montana 14 14 Utah 48 45Florida 861 881 Nebraska 60 62 Vermont 3 4Georgia 204 208 Nevada 84 92 Virginia 141 149Hawaii 19 17 New Hampshire 32 36 Washington 139 140Idaho 40 42 New Jersey 191 215 West Virginia 17 23Illinois 610 620 New Mexico 69 68 Wisconsin 228 234Indiana 201 218 New York 486 527 Wyoming 11 11Iowa 70 72 North Carolina 263 221 Guam 0 1Kansas 70 72 North Dakota 1 1 Puerto Rico 120 118Kentucky 98 103 Ohio 250 272 U.S. Virgin Islands 1 0
TOTAL 8,309 8,582
The Company owned approximately 20% of its retail drugstore locations and leased the remaining locations atAugust 31, 2014. The leases are for various terms and periods. See Note 3 to the Company’s ConsolidatedFinancial Statements in Part II, Item 8 of this Form 10-K. Net retail selling space remained consistent at89 million square feet at August 31, 2014 and 2013. Approximately 20% of Company stores have been opened orremodeled during the past five years, including our “Well Experience” store format in over 700 locations,including a market-wide transformation in the Indianapolis area and new flagship stores in select marketsincluding Boston, Chicago, Los Angeles, New York City, San Francisco, Washington, D.C., Las Vegas andPuerto Rico.
As of August 31, 2014:
• The Company’s retail store operations were supported by 19 major distribution centers with a total ofapproximately 11 million square feet of space, of which 13 locations are owned. The remaining spaceis leased. All distribution centers are served by modern systems for order processing control and rapidmerchandise delivery to stores. In addition, the Company uses public warehouses and third partywholesalers to handle certain distribution needs. As of August 31, 2014, AmerisourceBergendistributed substantially all of the Company’s branded and generic pharmaceutical products.
• The Company operated 34 principal office facilities containing approximately three million square feet,of which 13 locations were owned. The Company operated two mail service facilities containingapproximately 237 thousand square feet, one of which was owned.
• The Company owned 16 strip shopping malls containing approximately 500 thousand square feet.