Colliers International, in a rare 1031 property exchange involving two New York investors, a 21-acre parcel of land in a neighboring state, the world’s largest retailer, and a recently negotiated long-term triple-net ground lease, has completed a complex retail investment transaction valued at $10.675 million, company officials have announced.
Walmart recently signed a new 20-year ground lease on a parcel adjacent to Swansea Mall in Swansea, Massachusetts, where it has long had a presence. After several years of improving sales and growing demand for its products, including groceries, the company decided to replace its current in-line store with a free-standing Walmart Superstore next to the site of its existing store.
“What is unusual is that instead of re-purposing and enlarging the current store, Walmart decided to build a superstore on this neighboring site while it was still operating the smaller store,” said Colliers’ Eric Carlton, a specialist in triple-net properties and the broker who represented both New York-based Carlyle Development Group and Tom Fear, seller of the parcel. “When the new superstore was ready, the older, smaller store was razed and paved over to expand parking for the adjacent mall.
Walmart’s newly constructed superstore is a draw for the already heavily trafficked Swansea Mall, a 700,000-square-foot community shopping center. The new store totals 159,000 square feet, while the mass retailer’s former store totaled approximately 103,000 square feet, according to Carlton.
“The fact that Walmart decided to lease the property is another part of the transaction that did not follow the usual formula for them,” Carlton added. “Walmart likes to own the properties on which its stores are located, but this site was a rare opportunity where they decided to sign the long-term ground lease and build the new store here.”
Buyer of the parcel was a private investor from New York City and was represented by Cranford & Linder LLC. Following its initial 20-year term on the ground lease, Walmart will have 15 consecutive five-year lease renewal options. Walmart’s grand opening was in September 2013, Carlton noted, although it opened its smaller store there in 2001.