Recently Sold: CVS Pharmacy in Plantation, FL

At the beginning of September 2021, Ground + Space announced the sale of a CVS Pharmacy property in Plantation, Florida. Michael Zimmerman exclusively marketed the property on behalf of the seller, which received multiple offers and was sold to an all-cash buyer. This asset produced a superior cap rate (thanks in part to its extremely high rent-to-sales ratio) and featured a seven-day closing period.

Prime CVS Pharmacy Retail Asset

This corporate-guaranteed STNL asset has been in place at this location since 1996. The tenant recently exercised its second five-year option, signaling CVS’s long-term commitment to this site. The property boasts a drive-thru pharmacy—a sought-after feature due to COVID-19—and a MinuteClinic. Two options remain on the current lease, and there are no landlord responsibilities for ease of ownership.

Situated at the signalized intersection of West Broward Boulevard and North Job Hill Road, this CVS Pharmacy is across from Hawks Landing, one of South Florida’s premier luxury communities. Visitors to the site are also minutes from Westside Regional Medical Center and Westfield Broward, a shopping center anchored by Macy’s and Dillard’s.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Just Sold: Chili’s in Miami, FL

Ground + Space today announced the sale of a Chili’s Bar & Grill property in Miami, Florida. Michael Zimmerman exclusively marketed the property, which generated multiple offers and was sold to an all-cash buyer. This corporate-guaranteed asset is a prime example of a stable, income-producing property that requires no landlord maintenance for ease of ownership.

Single-tenant, net-leased properties like this one continue to attract the most attention from investors. As the retail property market works to rebound from the difficulties of the COVID-19 pandemic, investors are targeting assets with minimal near-term risk. This Chili’s Bar & Grill Ground lease fit the bill perfectly, thanks to its scheduled rental increases, long-term lease and new construction.

This Chili’s Bar & Grill restaurant is new a newly constructed outparcel within Coral Reef commons, a new mixed-use development anchored by Walmart. At least 900 residential units are planned as part of the project’s multiple development phases, which will considerably increase foot and vehicle traffic to the site. The property sits at a highly visible corner site facing Southwest 152nd Street. Florida’s Turnpike—a major east-west thoroughfare—is less than one mile away. Visitors to the site have immediate access to Zoo Miami and the heart of downtown Miami just 20 miles away.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Just Sold: Cheddar’s Scratch Kitchen in Tampa, FL

Ground + Space today announced the sale of a Cheddar’s Scratch Kitchen property in Tampa, Florida. Michael Zimmerman exclusively marketed the property, which received multiple offers and was finally sold to an all-cash 1031 buyer. Founded in 1979, Cheddar’s Scratch Kitchen is now owned by Darden Restaurants, Inc. (NYSE: DRI).

This property is a prime example of a stable, income-producing asset that requires no landlord maintenance. The Tire Choice’s Ground lease features a corporate guarantee, multiple five-year renewal options and scheduled rental increases. This asset is prominently positioned along North Dale Mabry Highway and benefits from extraordinary traffic counts in excess of 74,500 vehicles per day.

Cheddar’s Scratch Kitchen sits near numerous national retailers, including Outback Steakhouse, Barnes & Noble, Dunkin’, Starbucks and Carrabba’s Italian Grill. The property is also near the Publix-anchored Carrollwood Shopping Center. The area immediately surrounding the property is within the Greater Tampa Bay area and has seen population growth over the past decade of nearly 45 percent. The proximity of The Port of Tampa and Tampa International Airport make the area an easily accessible, popular destination in Florida for tourists and business visitors alike.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Just Sold: Wawa in Vero Beach, FL

Ground + Space today announced the sale of a new Wawa property in Vero Beach, Florida. Michael Zimmerman exclusively marketed the property, which sold for the full asking price to an all-cash 1031 buyer. This listing garnered multiple offers thanks to the property’s strong corporate tenant and Wawa’s status as an essential retailer.

Wawa convenience stores are one of the most sought-after net lease investments on the market today. Wawa sites offer investors long-term security and no maintenance or management responsibilities thanks to a Ground lease structure. Wawa convenience stores are located on prime real estate, typically at hard corner locations with great visibility and ingress/egress. This particular Wawa location has full access via Old Dixie Highway and additional exposure on three main roadways. Although the area surrounding the property is mostly zoned for industrial use, visitors have easy access to Vero Beach Regional Airport and Disney’s popular Vero Beach Resort.

Situated along Florida’s Treasure Coast, this newly constructed Wawa sits within Indian River County, Florida’s seventh-richest county by per capita income. The average annual household income within just three miles of the site is nearly $85,000. Additionally, the area immediately surrounding this Wawa has seen a population boom, growing an average of around 18 percent within a five-mile radius over the past decade.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Just Sold: McDonald’s in California, MD

Ground + Space today announced the sale of a McDonald’s property in California, Maryland. After receiving multiple offers, the tenant chose to exercise its right of first refusal to purchase the property. This asset features a 20-year Ground lease that includes scheduled rental increases and multiple five-year options to extend the lease well into the future.

This McDonald’s property is a prominent outparcel to the Laurel Glen Shopping Center along busy Three Notch Road. Nearby retailers include Target, BJ’s, Walmart, Harris Teeter, Ross Dress For Less, Lowe’s and countless others. This particular area of Southern Maryland is one of the fastest-growing regions in the state, and retailers along Three Notch Road benefit from an affluent population with annual household incomes exceeding $96,000. 

The quick-service restaurant (QSR) sector has once again proven to be resilient, even during the face of a global pandemic. Drive-thru lanes, contactless payment options and curbside pick-up have become increasingly important as they directly address their customers’ needs in a convenient way. Even before the pandemic began last March, many QSRs had begun to evolve their store formats to enhance different aspects of the customer experience, from pay kiosks to partnerships with online delivery platforms. McDonald’s is one QSR chain that provides investors with a stable, long-term net lease investment with a reliable, credit-rated tenant, consistent monthly income and few to no maintenance responsibilities.

About Ground + Space

Ground + Space is a net lease brokerage firm that leads with an emphasis on personalized relationships. Michael Zimmerman and team have curated a brokerage firm and investment sales platform focused on boutique amenities and down-to-earth service. During these uncertain times, Ground + Space remains dedicated to providing best-in-class services and results to our clients. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. Contact us today to find out more!


Third Quarter STNL Report

In the days of coronavirus, it’s easy to become overwhelmed by all the bad news splashed across newspaper headlines, television chyrons and on social media. At Ground + Space, we strive to find the silver linings in even the most desperate of situations in order to provide our clients with a more comprehensive outlook on the economy as it relates to the commercial real estate sector. Let’s take a look at some of the major takeaways from the first few weeks of the third financial quarter of 2020:

STNL Properties are Poised for Success

Popular single-tenant net leased (STNL) properties include many essential retailers. Quick-service restaurants (QSR), auto parts stores like The Tire Choice, convenience stores, home improvement retailers and drugstore giants like CVS Pharmacy have all survived the COVID-19 pandemic relatively unscathed thus far. Not only are net-leased assets showing resilience in the face of a global pandemic, they are also properties that continue to attract capital in times of economic downturn.

What’s the secret to their success? Numerous national chains—like Wendy’s and McDonald’s—were aided by in-place drive-thru service, while more traditional restaurant chains and other brick-and-mortar essential retailers benefited from robust delivery, carryout and curbside pick-up platforms. Although many of these retailers reported a dramatic decline in foot traffic, those same retailers have seen profits soar as consumers increase the size of their receipts. Lowe’s and The Home Depot in particular set record highs for sales in the second financial quarter.

Power and Lifestyle Centers Outperform Expectations

Traditional enclosed shopping centers and malls have long been on the decline, but lifestyle and power centers have remained top of mind for both investors and consumers. The prevalence of essential retailers in these types of shopping centers—especially well-known grocery anchors like Whole Foods—has allowed operations to remain strong. In fact, only six percent of net absorption for the year thus far has occurred within this particular sector. A whopping 25 percent of newly vacant space has occurred at malls as retailers like GNC, Victoria’s Secret and Gap announced massive closures. As the market resizes, power and lifestyle centers will most likely attract both tenants and shoppers from malls as they begin to close for good.

Consumer Spending Begins to Recover

Although there has been little progress made regarding extending benefits from the original COVID-19 stimulus package, some segments of the country’s population have begun spending again. By June, many markets saw retail sales increases near pre-pandemic levels. However, only time will tell if this trend will continue into the third and fourth financial quarters. Several states have slowed or halted their reopening plans as new clusters of positive COVID-19 cases arise. If these trends continue, consumer confidence and, in turn, consumer spending, may decline yet again.

Ground + Space is Here to Help

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond.

Stay Safe and Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


Good News: Retailers Grow Despite Pandemic

Economists expect retail sales to increase approximately 1.9 percent this month. While any increase is good news, it’s a significant drop off from June’s increase of 7.5 percent. Not all hope is lost, however, at least not for some major retail tenants. Today, we take a look at some of the retailers who are making moves and shattering records, even amidst a global pandemic.

7-Eleven

7-Eleven recently entered into a definitive agreement with Marathon Petroleum Corp. (NYSE: MPC) to purchase the Speedway convenience store chain for $21 billion in an all-cash transaction. The arrangement is expected to conclude in the first fiscal quarter of 2021 and includes a 15-year fuel supply agreement for 7.7 billion gallons per year associated with the Speedway business. This large-scale deal includes approximately 3,900 convenience stores. These additional stores will bring 7-Eleven’s retail footprint to roughly 14,000 locations throughout the United States and Canada.

At Home

At Home’s CEO recently told CNBC that the company has been slowly expanding its store count by roughly 20 percent per year over the past seven years. The home décor and furnishings retailer currently has 219 locations but may expand to as many as 600 thanks to record-breaking net sales in its second fiscal quarter. Thanks to its listing as an “essential retailer,” At Home boasted net sales of $515 million in its most recent quarterly filing. What’s behind the increase? At Home is a one-stop-shop for a broad range of home goods, and the store’s open, spacious layouts and the brand’s omnichannel platform allowed the company to easily accommodate COVID-19 regulations.

Chili’s and It’s Just Wings

Brinker International, Inc. (NYSE: EAT), the parent company of Chili’s and Maggiano’s, recently introduced a delivery only-service called “It’s Just Wings.” Since launching in late June, this concept is now on track to exceed $150 million in sales during its first year. So, how does It’s Just Wings work? Brinker International is utilizing what it calls “ghost kitchens”—restaurants with a delivery service instead of a dining room. The “ghost kitchen” concept involves setting up kitchens that only make food for customers who order online, through mobile apps or via third-party delivery services. Instead of using independent kitchen space, It’s Just Wings now operates using separate, dedicated kitchen areas in 1,050 of Brinker’s U.S. Chili’s and Maggiano’s restaurants. This new concept—along with the established pick-up and delivery services already in place under the Brinker International umbrella—have generated strong bottom-line results.

CVS and Publix

Both of these leading retailers have seen a marked increase in year-over-year sales. Both companies benefitted from their status as “essential retailers” during the COVID-19 pandemic. CVS Health Corp. (NYSE: CVS) reported a 35.2 percent increase of $634 billion in the company second fiscal quarter of 2020. The company’s net income also rose to $5 billion (a 48 percent increase). Although CVS plans to close 22 underperforming stores, the remainder of its locations have remained open since the pandemic was first declared a national emergency on March 13, 2020. Publix has also remained open throughout the pandemic. Within its second quarter earnings report, Publix announced that sales have increased by 21.8 percent. Publix estimates that its second quarter sales increased by $1.5 billion due to the pandemic.

Starbucks

Although Starbucks Corp. (NASDAQ: SBUX) saw a decline in U.S. comparable store sales during its third quarter, the company still opened 130 net new stores. This marks a five percent year-of-year unit growth. The company currently operates or licenses approximately 15,243 locations in the United States and 32,180 worldwide. As of late July, Starbucks has opened roughly 97 percent of all its company-operated stores, both in the United States and China. Temporary closures affected locations in airport and college and university locations within North America.

Navigating These Uncertain Times

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The market changes daily, so please contact one of our brokers for specialized guidance during this time.

Stay Healthy and Safe

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


Coronavirus Update: State of the Market

The month of July shattered records for new coronavirus cases, hospitalizations and deaths. Unlike in the months of March and April, the epidemic is affecting both urban and rural areas in equal measure. The effects of social distancing, store closings and high unemployment have led to an economic downturn, which has impacted even the strongest segments of the commercial real estate sector.

Commercial Real Estate Prices Wane

As expected, prices for commercial real estate assets weakened in the second financial quarter of 2020. Properties with a smaller price tag (between $1-$4 million) fared better than their higher-priced counterparts, which saw a decline in activity of around 38 percent. Sales totals are also down when compared to previous years. However, this pricing weakness was not felt in every sector. The industrial sector was the only property type index to post gains. This is due in large part to the accelerated adoption of e-commerce, which has in turn supported industrial demand for warehouse space.

GDP Declines in Second Quarter

The United States saw the sharpest decline in its gross domestic product (GDP) in the second fiscal quarter of 2020 since the federal government began tracking this data in 1947. From April to June 2020, the GDP fell at an annualized rate of 32.9 percent. This was due in large part to the widespread shutdown measures imposed by governors across the country as COVID-19 began its resurgence.

To put things into perspective, the GDP only fell by 8.4 percent during the worst three months of what is now called “The Great Recession” in 2008. Economists expect GDP growth to return in the third financial quarter, but the rate is largely in question as more states are pausing or reversing their lockdown orders.

Retailer Spotlight: Wawa

Although the list of retailers filing for bankruptcy grows larger on an almost daily basis, some popular retailers are taking proactive steps to provide long-term solutions for a post-coronavirus world. One such retailer is Wawa. The Pennsylvania-based convenience store chain recently announced plans to build its first-ever freestanding drive-thru location in Township, Pennsylvania. This will be the brand’s first store focused solely on drive-thru and curbside pick-up services for its customers.

According to Terri Micklin, Wawa’s Director of Construction, the company hopes to “learn from the layout, workflow and traffic flow at this location” as Wawa explores multiple alternatives to its traditional store formats. At least one other Wawa property currently under construction—this one in Westhampton, New Jersey—will benefit from a drive-thru feature.

Ground + Space is Here to Help

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. Are you looking for advice on whether to sell one of your assets? Please contact one of our brokers for specialized guidance during this time.

Stay Safe and Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


COVID-19 CRE News: July Updates

Thanks to a surge of COVID-19 cases in new hotspots across the country, commercial real estate investment activity has slowed considerably. The Ground + Space team have been hard at work tracking the effects of the novel coronavirus on the commercial real estate industry, both in our home state of North Carolina and beyond. Below, we take a look at some of the top headlines from the first half of the month of July:

Decline in National Investment Activity

Owners and investors remain cautious regarding sales of retail assets. This trend has permeated markets across the country, especially those in fast-growing cities. Some locales that have seen steep drop-offs in commercial sales activity include Raleigh, Seattle, Nashville, Atlanta and even Washington, D.C. Historically, major markets such as New York, Miami, San Francisco and Los Angeles are the first to recover in terms of sales volume following economic downturns. That may not be the case this time around.

Any future increase sales activity will likely be tied to areas that can sustain recovery from both a public health and economic standpoint. There is a glimmer of hope on the horizon: Most markets around the country saw an increase in deal volume in the month of June. This could signal an uptick in deal velocity in the third and fourth quarters of 2020.

Retail Spending Increased in June

Retail sales in the United States rose approximately 7.5 percent in June. This is due to the increase in store openings across the country as retailers welcome back guests to their brick-and-mortar locations. In June and July, consumers have been spending more in four key sectors: automotive, clothing, furniture and electronics.

Although increased retail activity is a welcome harbinger of good news, continued recovery in this sector will be determined by the ability of cities and states to remain open in the face of rising COVID-19 infections. Something important to keep in mind: Despite this increase in activity, total retail sales for the second quarter of 2020 were still down by 8.1 percent.

Retailers Continue to Downsize Footprints

National retailers continue to downsize their retail footprints, and some have even turned to Chapter 11 bankruptcy proceedings for protection. New York & Company parent RTW Retailwinds is just one of many clothing retailers to join the likes of J.C. Penney, Brooks Brothers and Neiman Marcus in filing for bankruptcy.

Banking giant Wells Fargo recently announced a proposed $10 billion cut in annual expenses. This move will shrink the brick-and-mortar footprint of the nation’s third-largest bank substantially. In the short term, Wells Fargo plans to consolidate its brick-and-mortar locations, which would include not only bank branches, but field offices and corporate sites as well. The move comes as more and more Americans move to digital and mobile banking.

A Bit of Good News

While it’s disheartening to hear that many retailers are shutting their doors permanently, others have found a way to pivot their business models to align with recent events. One such retailer is Tropical Smoothie Café. Since March 1, 2020, the fast-casual café concept has opened 35 new locations. Additionally, the company has signed at least 103 new franchise agreements in 2020.

Chipotle is also looking to expand its footprint and plans to hire as many as 10,000 new employees during the next few months. The concept now has a presence in 32 states, and many of its new restaurants feature a drive-thru lane (dubbed “Chipotlane”). Chipotle expects that more than 60 percent of its new restaurants will feature this “Chipotlane”—a measure that will allow more locations to remain open during the pandemic.

Ground + Space is Here to Help

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The IRS 1031 tax deadline is less that one week away, so please contact one of our brokers for specialized guidance during this time.

Stay Safe and Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.


Changing Trends in Response to COVID-19

During the past few months, commercial real estate investment volume has dropped approximately 30 percent. This has made deal-making more difficult for both brokers and investors. Today, we will dive into a few of the trends that are reshaping the commercial real estate industry and how investors and brokers can capitalize on these changing dynamics.

Investors Search for Property Bargains

It is unsurprising to find that the value of commercial real estate assets has declined in recent months. This is a direct result of falling occupancy and rental rates. However, many investors are taking this economic downturn as an opportunity to acquire distressed properties. A distressed sale can include the following: auctions, foreclosures, bank-owned sales, short sales and deed in lieu of foreclosure transfers.

According to CoStar data, distressed property sales have surpassed that of traditional hotel and retail properties—two of the sectors hit hardest by the coronavirus pandemic. In June, distressed retail sales were at 2.2 percent, and distressed sales made up 4.4 percent of all hotel sales. What does this mean? Right now, investors are shifting their focus away from core assets in anticipation of future repricing opportunities.

E-Commerce Effects on Commercial Real Estate

E-commerce has gained in popularity over the past decade. Current e-commerce retail penetration rates have grown to 20 percent. This number is expected to increase significantly due to the COVID-19 pandemic and its lasting effects on the worldwide economy and consumer shopping habits. How will the commercial real estate landscape adjust to this “new normal?”

As consumers visit brick-and-mortar stores on a less frequent basis, lower-quality, struggling assets—like aging enclosed shopping malls—will either shutter or be repurposed into mixed-use developments. Restaurants, quick-service restaurants (QSR) and fast food retailers with drive-thru service will remain essential, but their reliance on delivery and takeout platforms will increase. Delivery platforms will also be critical to companies like Whole Foods and other grocery store chains. Experiential spaces—like movie theaters, gyms, fitness studios and even casinos—will also be affected as individuals consume more at-home solutions like Netflix, YouTube and Peloton.

Retailers React to COVID-19

While many retailers have begun to liquidate assets, close storefronts and file for bankruptcy protection, others have managed to meet these challenging times with new, innovative ideas. For instance, Walgreens Boots Alliance (the parent company of Walgreens) has partnered with VillageMD to introduce full-service doctor offices co-located in stores within more than 30 U.S. markets. This news comes as retail giant Walmart unveiled its plan to open freestanding Walmart Health Facilities and CVS Health begins to expand its HealthHub store format.

Ground + Space is Here to Help

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have several listings available featuring retailers that are in a prime position to succeed in a post-pandemic economy. We are committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The IRS 1031 tax deadline is less that one week away, so please contact one of our brokers for specialized guidance during this time.

Stay Safe and Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.