Stan Johnson Company, one of the nation’s premier net lease brokerage firms, has completed the sale of a single-tenant, freestanding retail building leased to Walmart. The 205,000-square-foot property is located at 1490 Hudson Avenue in Rochester, New York. NNN Acquisition Group LLC, a developer from Dallas, Texas, purchased the building for $8.3 million at a 7.00 percent cap rate.
Stan Johnson Company’s Joshua Pardue exclusively represented the seller, Urban Edge Properties, an institutional investor headquartered in New York City.
“We are pleased to have been able to conduct this transaction on behalf of our client, an institutional urban retail investor that was looking to divest of assets that no longer matched the firm’s primary business model,” said Pardue, Senior Director in Stan Johnson Company’s New York office. “Due to the short-term ground lease, the transaction was more dynamic than most net lease dispositions, but we were able to identify an investor with development capabilities that saw value in both the credit tenant as well as the underlying development opportunity that we presented to the market.”
The property is located in a community with high population density, and it has strong visibility on Keeler Expressway, which is a main thoroughfare in the area. But certain areas in upstate New York have seen softer market conditions in recent years.
“With less than five years remaining on the ground lease, and tenants not pursuing blend and extends as early as they once did, there was some uncertainty surrounding the tenant’s renewal, so the project needed to be underwritten for residual value and potential redevelopment,” Pardue added.