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Strip drugstore sale one of priciest CVS deals ever


It’s hard to single out the most noteworthy part of the recent sale of a local CVS drugstore.

Maybe it’s the deal’s price tag, certainly the most expensive CVS ever sold locally, and possibly one of the country’s priciest CVS deals ever.

Perhaps it’s the shop’s location on the Strip just south of Sahara Avenue, which positions it as a harbinger of development to come.

Or it could be the store’s status as part of a growing contingent of affordable, neighborhood-style retail amid the city’s biggest concentration of high-end boutiques.

Actually, for all of those reasons, it was an unusual deal when brokers with CBRE completed the sale of the CVS store inside Sky Las Vegas, a high-rise condo building at 2700 Las Vegas Blvd. South.

Start with that closing price. The 14,378-square-foot store — initially listed at $38 million about five months ago — closed for just over $30 million in late March. That’s $2,190 per square foot, or more than five times the $350 to $400 per square foot CVS usually trades at, said Marlene Fujita Winkel, vice president of CBRE Las Vegas’ Private Capital Group.

The price “raised a lot of questions,” Winkel said. “Folks were wondering if they’d find something hidden under it, like gold or diamonds.”

But it was potential riches above-ground that commanded that premium. First, CVS is paying huge rent to be on the Strip, Winkel said. Plus, the company, which opened at the site in 2007, has a 22-year lease, and investors love the security of long rental agreements.

That long-term lease isn’t the only forward-thinking angle that interested investors.

Matt Bear of CBRE represented the buyer, Capital Square Acquisitions LLC, a real estate management and development firm based in Virginia. Bear said Capital Square invested in the space because its executives expect economic conditions on the north end of the Strip to “radically improve” in coming years.

Winkel said the location’s potential has received good press since Genting Group of Malaysia announced a year ago that it would buy the moribund Echelon and transform it into Resorts World Las Vegas within half a decade.

“People were struggling for several years to gain momentum in the area. Then Genting made its announcement, and SLS Las Vegas (the former Sahara) got underway,” she said. “All of this activity will help make this property even more valuable in coming years.”

CBRE’s Charles Moore, who worked with Winkel to represent seller Sky Las Vegas Condominiums Inc., said the stalled Fontainebleau across the street didn’t help the property’s image, either. But with construction picking up elsewhere on the Strip, people believe that “at some point, something will happen” with the site.

The CVS deal is also part of a growing everyday feel for retail on the Strip. The shopping sector is undergoing a renaissance along the resort corridor, as operators including Caesars Entertainment and MGM Resorts International build new retail and entertainment plazas to offer consumers something new. Neighborhood retailers could come on strong as the sector evolves.

Ross Dress for Less and Marshalls already have locations at the Showcase Mall next to the MGM Grand. Walgreens has a store across from The Cosmopolitan of Las Vegas, and is rumored to be planning another at the northeast corner of the Strip and Sahara.

Neighborhood retailers are a natural fit for a boulevard that is home to increasing numbers of residents. Sky Las Vegas, for example, has 409 units, 310 of which are owned by people who live on-site at least part time, or who rent out their units. Those residents need places to grab a quick carton of milk, Moore said.

But there’s also a sizable number of tourists pacing the Strip who aren’t in the market for an $8,000 suit from Kiton, inside Aria’s Crystals, or a $7,000 mink baguette from Fendi at Via Bellagio.

“You are going to continue to see that luxury retailer flock to the Strip, but you’re also going to see more middle-priced retailers looking to capture that dollar,” Moore said.

■ Brokers with Colliers International handled two new deals worth more than $20 million.

Michael Stuart represented residential builder Greystone Nevada LLC in its $20.8 million purchase of 56.5 acres of vacant land located throughout the southwest part of the Las Vegas Valley. Robert Torres and Scott Gragson represented seller GKT Acquisitions.

Also, Dean Willmore, SIOR, represented seller Eldorado Industrial Park LLC in its $21 million sale of Eldorado Business Park at 7445 S. Dean Martin Drive. Real estate investment firm Stockbridge Funds bought the 208,076-square-foot park, which sits on 15 acres.

In other Colliers news, Stuart represented 2010-1 CRE NV-Land LLC in its $2.5 million sale of a 9.6-acre parcel at the northeast corner of Buffalo Drive and the 215 Beltway. Torres and Gragson represented the buyer, Beltway 4.77 LLC.

Brian Riffel helped CML-NV Airport South LLC with its $615,000 sale of a 7,463-square-foot industrial property at 2053 Pama Lane. Michael De Lee of De Lee and Associates represented buyer Auto Drop LLC.

And Chris Connell represented Judy K. Jordan Family Trust UTA Dtd January 23, 1998 in its sale of an 8,456-square-foot office building at 4315 N. Rancho Drive. Brendan Keating of The Equity Group represented the buyer, TEG Rancho LLC, in the $350,000 agreement.

■ Brokers with CBRE recently closed a three-building deal in the city’s industrial core. Winkel and Moore worked with Ashley Kolaczynski to represent 2000 Western LLC in its purchase of buildings at 1924, 1930 and 2000 Western Ave. The $1.1 million buy encompasses 29,153 square feet of space.

■ Recreation Development Co. has wrapped construction on Carlo’s Bakery inside the Grand Canal Shoppes at The Venetian. The $2 million bakery, owned by Buddy Valastro of TLC’s “Cake Boss” reality TV series, opened March 31. Recreation Development Co. worked on the 2,251-square-foot space with Celano Design Studio of New York and Moser Architecture Studio of Las Vegas.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.

 

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