Walgreens SE - Stan Johnson Company
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DOWNTOWN CHICAGO
Subject Property
AY (18 8,972 VP D)
ED EN S EX PR ES SW
INT ER STAT E 94 /
IL R T 5
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MPS TE R ST
REE T (42 ,0
89 V P D)
SE
Subject Property
Offering Memorandum
Walgreens
5730 W. Dempster Street | Morton Grove (Chicago), IL 60053
Confidentiality and Restricted Use Agreement Offered Exclusively by
This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your
consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM Brad Feller
may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without Senior Director
prior written authorization and consent of SJC. bfeller@stanjohnsonco.com
+1 312.240.0194
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This IL Lic. # 471007951
COM contains descriptive materials, financial information and other data compiled by SJC for the convenience
of parties who may be interested in the Property. Such information is not all inclusive and is not represented to
include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has Blaise Bennett
not independently verified any of the information contained herein and makes no representations or warranties bbennett@stanjohnsonco.com
of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation +1 312.777.2449
and/or financial information contained herein are qualified in their entirety by reference to the actual documents
and/or financial statements, which upon request may be made available. An interested party must conduct its
own independent investigation and verification of any information the party deems material to consideration of Brandon Duff
the opportunity, or otherwise appropriate, without reliance upon SJC. Regional Director
The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right
to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s)
as is, where is, and with all faults, without representation or warranty of any kind except for any customary
warranties of title.
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you
have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other
form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your
own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any
time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4)
for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release
and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents
and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or
use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any
of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms,
conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and Stan Johnson Company
(6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be 303 East Wacker Drive | Suite 1111
entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection Chicago, Illinois 60601
with such a violation and shall not be required to post a bond when obtaining such relief. P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
Table of Contents
Executive Summary
The Offering 4
Investment Highlights 5
Pricing and Property Overview 6
Tenant Information
Lease Abstract 7
Site Plan. 8
Tenant Overview 9-11
Location Information
Location Overview 12
Aerial 13
Property Photos 14
Surrounding Property Photos 15
Demographics 16
E
N
The Offering
Stan Johnson Company is pleased to offer for sale to qualified investors,
the opportunity to purchase a 100% fee-simple interest in the Walgreens
property located at 5730 W. Dempster Street in Morton Grove, Illinois (the
“Property”). Located just 13 miles north of “The Loop” and 8 miles northeast
of O’ Hare Airport, Walgreens recently signaled strong confidence in and
a commitment to the store by signing a new 8-year lease extension.
The Property is located on an urban infill and high trafficked retail
corridor with traffic of approximately 42,089 VPD along Dempster
Street. The Property benefits from outstanding demographics with a
population of approximately 149,630 and an average household income
of approximately $108,072 within 3 miles of the site. The Property features
immediate access to Edens Expressway (Interstate-94), which leads
directly to downtown, central Chicago. Dempster Street is home to a
number of surrounding area retailers including Dunkin’ Donuts, Subway,
Giordano’s Pizza, Chase Bank, FedEx, Binny’s Beverage Depot, CVS
Pharmacy, Starbucks, McDonald’s, Shell Gas Station, and BP Gas Station,
among many others.
Walgreens is currently operating under a 63-year lease, subject to the
Tenant’s right to terminate the lease on July 31, 2028, and every five years
thereafter through July 31, 2058, with six months’ notice. The rental rate of
$375,435 annually is flat throughout the term and landlord responsibility
is limited to the maintenance, repair and replacement of the roof and
structure for the duration of the term.
Walgreen Co., a subsidiary of Walgreens Boots Alliance, Inc., (NASDAQ:
WBA), had FY2015 (ended August 31, 2015) revenue of $103.44 billion and
net income of $4.22 billion. As of November 30, 2015, the company had
a net worth of $30.71 billion. Currently, Walgreen Co. holds a BBB rating
by Standard and Poor’s and has a market capitalization of $100.37 billion
as of April 13, 2015.
Walgreens • Morton Grove, IL • 4
Investment Highlights
Recent Lease Extension w/12 Years of Base Term Remaining
Walgreens recently entered into an approximate 8-year lease extension that
pushes the overall term expiration out through July 31, 2063. The initial base
lease term runs through July 31, 2028, and features 7, 5-year options.
Best-in-Class Guaranty by Walgreen Co.
Walgreen Co. is a subsidiary of Walgreens Boots Alliance, Inc. (NASDAQ:
WBA) and is currently rated BBB by Standard and Poor’s. WBA had FY2015
revenue of $103.44 billion and net income of $4.22 billion.
Superior Visibility & Traffic Counts
Walgreens features direct access to Edens Expressway (Interstate-94), and
is located on a high trafficked retail corridor with approximately 42,089
VPD along Dempster Street.
Prime, Affluent Chicago “North Shore” Location
The Property is located in the Village of Morton Grove, positioned on the
prestigious Chicago North Shore, an area highly regarded for its densely
populated neighborhoods and affluent population. The Property boasts an
average household income of $93,327 within 1 mile, $108,072 within 3 miles,
and populations of 149,630 within 3 miles, and 498,365 within 5 miles.
Secured Permit for Operation from the Village of Morton Grove
The subject Walgreens Property has a permit for operation for the duration
of the lease from the Village of Morton Grove. This represents a barrier to
entry into the local market.
Drive-Thru Pharmacy with Full Liquor Department
The Property features a drive-thru pharmacy directly accessible from
Dempster Street. Additionally, it benefits from a Full Liquor Department.
These are both significant advantages over other Walgreens and pharmacy
Subject Property stores without the same attributes.
Walgreens • Morton Grove, IL • 5
Pricing Overview
Walgreens | Morton Grove (Chicago), IL
Offering Price: $6,006,960
Offering Cap Rate: 6.25%
Current Annual Rent: $375,435
Tenant: Bond Drug Company of Illinois
Guarantor: Walgreen Co. (S&P Rated: BBB)
Property Overview
5730 W. Dempster Street | Morton Grove (Chicago), IL 60053
Building Size (SF): +/- 13,905 SF
Land Area (Acres): +/- 1.02 Acres
10-17-428-031
10-17-423-035
10-17-428-032
10-17-423-037
Parcel ID: 10-11-428-033
10-17-421-038
10-17-428-034
10-17-428-039
10-17-428-035
Encumbrances: None, Delivered Free & Clear
Subject Property
Walgreens • Morton Grove, IL • 6
Lease Abstract
Tenant: Bond Drug Company of Illinois
Guarantor: Walgreen Co. (S&P Rated: BBB)
Property Address: 5730 W. Dempster Street, Morton Grove, IL 60053
Building Size (SF): +/- 13,905 SF
Lot Size (Acres): +/- 1.02 Acres
Year Built: 2000
Lease/Rent Commencement: 8/1/2000
Lease/Rent Expiration*: 7/31/2028
Base Lease Term*: 28 Years
Base Lease Term Remaining: Approx. 12 Years
Current Annual Rent: $375,435
Annual Rent PSF: $27.00
Subject Property
Effective Options Periods*: 7, 5-Year Options
Renewal Notice: Six (6) Months
Rental Increases: None
Lease Type: NNN
LL Responsibility: Roof & Structure
Ownership Interest: Fee Simple
Tenant has 10 Days to respond after Bona Fide
Right of First Refusal:
Offer is presented
2.0% of Gross Sales excluding sale of food items and
Percentage Rent: prescription items, and 0.5% of Gross Sales of food
items and prescription items (refer to lease for details)
Drive-Thru: Yes
10-17-428-031
10-17-423-035
10-17-428-032
10-17-423-037
Property ID: 10-11-428-033
10-17-421-038
10-17-428-034
10-17-428-039
10-17-428-035
Encumbrances: None, Delivered Free & Clear
*This Walgreens lease has a lease term of 63 years through July 31, 2063, with the Tenant to retain N
the option to terminate as of July 31, 2028, and every five years thereafter through July 31, 2058, with
six (6) months’ notice. Years 1-28 are referred to as the “Base Lease Term” and each of the subse-
quent five (5) years as “Effective Option Periods.”
Walgreens • Morton Grove, IL • 7
Site Plan
MENARD AVENUE
MANGO AVENUE
IL RT 58 / DEMPSTER STREET (42,089 VPD)
N
Walgreens • Morton Grove, IL • 8
Walgreens Boots Alliance Organizational Chart
Walgreens
Boots Alliance
Retail Pharmacy Pharmaceutical
USA Wholesale
Retail Pharmacy
International
Duane
Walgreens
Reade Alliance Healthcare
(all 50 States)
(New York)
Benavides (Mexico) Ahumada (Chile) Boots (Europe)
Walgreens • Morton Grove, IL • 9
Walgreens Boots Alliance Overview
Walgreens Boots Alliance (Nasdaq: WBA) is the the development of a fully integrated, global Walgreens is the largest drugstore chain in
first global pharmacy-led, health and wellbeing platform for the future to provide innovative the US. The company had fiscal 2015 sales
enterprise in the world. The company was ways to address health and wellness challenges. of more than $103.4 billion. Founded with a
created through the combination of Walgreens The company is well positioned to expand single store in Chicago in 1901, Walgreens is
and Alliance Boots in December 2014, bringing customer offerings in existing markets and today continuing to build a seamless customer
together two leading companies with iconic become the health and wellbeing partner of
experience through its 8,182 drugstores and its
brands, complementary geographic footprints, choice in emerging markets.
digital businesses that include Walgreens.com,
shared values and a heritage of trusted
drugstore.com, Beauty.com, SkinStore.com and
health care services through pharmaceutical
VisionDirect.com.
wholesaling and community pharmacy care,
dating back more than 100 years.
COMPANY PROFILE
The company employs over 370,000 people
and has a presence in more than 25 countries; Company: Walgreens Boots Alliance 6.2 Million Customers Visit
it is the largest retail pharmacy, health and Walgreens Stores Daily
No. of Retail
daily living destination in the USA and Europe. 13,100 (as of 8/31/2015)
Locations:
Including its equity method investments,
Walgreens Boots Alliance is the global leader in Credit Rating: S&P: BBB
pharmacy-led, health and wellbeing retail with TENANT PROFILE
over 13,100 stores in 11 countries. The company Stock Symbol: WBA (Nasdaq)
includes the largest global pharmaceutical Company: Walgreens
wholesale and distribution network with over Employees: 370,000+
350 distribution centers delivering to more No. of Retail
8,182 (as of 8/31/2015)
Website: www.walgreensbootsalliance.com Locations:
than 200,000 pharmacies, doctors, health
centers and hospitals each year in 19 countries. Credit Rating: S&P: BBB
In addition, Walgreens Boots Alliance is the
world’s largest purchaser of prescription drugs Total Revenue: $103.44 Billion (as of 8/31/15)
and many other health and wellbeing products.
Net Worth: $30.71 Billion (as of 11/30/15)
Its portfolio of retail and business brands Fortune Magazine: Top 5 World’s Most
includes Walgreens, Duane Reade, Boots and Admired Companies (March 2015) Year Founded: 1901
Alliance Healthcare, as well as increasingly
global health and beauty product brands, such Headquarters: Deerfield, Illinois
Forbes: 165th out of 2000 Largest
as No7, Botanics and Soap & Glory.
Global Public Companies (May 2015)
Website: www.walgreens.com
The creation of Walgreens Boots Alliance
provides an opportunity to further accelerate
Walgreens • Morton Grove, IL • 10Retail Pharmacy USA Overview
The Retail Pharmacy USA Division’s principal The division has more than 74,000 healthcare August 31, 2015, compared to 8,309
retail pharmacy brands are Walgreens and service providers, including pharmacists, locations (8,207 drugstores) a year earlier.
Duane Reade. Together, they form the largest pharmacy technicians, nurse practitioners and Prior year’s locations included 91 infusion
drugstore chain in the USA. As of August 31, 2015, other health related professionals. Through and respiratory services facilities in which
the division operated 8,173 drugstores across all them, they expect to continue to play a growing a majority interest was sold in fiscal 2015.
50 states, the District of Columbia, Puerto Rico role in government and employer efforts to
and the US Virgin Islands. As of August 2015, control escalating healthcare costs. Pharmacy sales increased by 8.2% in fiscal 2015
approximately 76% of the population of the USA and represented 66.1% of the division’s total sales.
lives within five miles of a Walgreens. The Retail Pharmacy USA Division’s Comparable pharmacy sales increased 9.3% in
strategy is designed to further fiscal 2015. The effect of generic drugs, which
The division sells prescription and non- transform the traditional drugstore have a lower retail price, replacing brand name
prescription drugs, as well as general by offering ultimate convenience, drugs reduced prescription sales by 1.8% and
merchandise, beauty care and photofinishing. driving the best customer loyalty, and reduced division total sales by 1.0%. Adjusted
They provide customers with convenient, omni- delivering extraordinary customer to 30-day equivalents, the division filled 894
channel access to consumer goods and services, and patient care. They seek to expand million prescriptions in 2015. Third party sales,
pharmacy, and health and wellness services in product and service offerings across where reimbursement is received from managed
communities across America. They also offer new channels and markets where, care organizations, government and private
products and services through mail, telephone in addition to stores, customers and insurance, were 96.8% of prescription sales.
and online, and provide specialty pharmacy and patients can utilize health system
respiratory services, as well as retail clinics. pharmacies, Walgreens.com, mobile Retail sales increased 1.9% in fiscal 2015
applications and social media sites. and were 33.9% of the division’s total sales.
Prescription drugs are the largest product Comparable retail sales increased 1.5%. The
class, followed by general merchandise and increase in comparable retail sales in fiscal
Retail Pharmacy USA 2015 Financial Highlights
nonprescription drugs. 2015 as compared to fiscal 2014 was primarily
attributed to an increase in basket size partially
The Retail Pharmacy USA division, whose
offset by lower customer traffic.
Percentage of Sales principal retail pharmacy brands are Walgreens
Product Class
(at 8/31/2015) and Duane Reade, had fiscal 2015 sales of
Pharmacy: 66% $81.0 billion, an increase of 6.0% over fiscal
2014. Total sales increased primarily due to
Retail: 34%
higher comparable store sales, which were
Total 100% up 6.4% in fiscal 2015. The division operated
8,182 locations (8,173 drugstores) as of
Walgreens • Morton Grove, IL • 11Location Overview
The Village of Morton Grove is a near northern suburb of the
City of Chicago, located 13 miles north of “The Loop”, Chicago’s
CBD, 8 miles northeast of O’Hare Airport, and 6 miles west of
Lake Michigan. The village had a population of 23,270, as of
Soldier Field Stadium
the 2010 census. Although primarily residential, the village has
significant commercial and industrial areas. Approximately 20%
of the land in the community is owned by the Cook County
Forest Preserve District and is set aside for open space and
recreation. Morton Grove is the home of award-winning parks
and schools, as well as a community of safe neighborhoods,
schools, parks, open space and community facilities.
Morton Grove has a total area of 5.09 square miles, within which
there are a number of major commercial corridors including
Dempster Street, Waukegan Road, Golf Road, Oakton Street,
as well as the following major retail centers: Prairie View Plaza,
Village Plaza, Washington Commons, Lonore Plaza. Morton
Grove benefits from its central location in Chicago’s northern
suburbs and its excellent transportation and access.
Chicago is the largest city in the state of Illinois and the third Downtown Chicago, IL Navy Pier
most populous city in the U.S. The city has approximately 2.7
million residents. Its metropolitan area, sometimes called
Chicagoland, is the third-largest in the U.S., after New York City
and Los Angeles, with an estimated 9.8 million people.
Chicago is listed as an “alpha+ global city” by the Globalization
and World Cities Research Network, and ranked seventh in the
world in the 2012 Global Cities Index. The city is an international
hub for finance, commerce, industry, telecommunications,
and transportation, with O’Hare International Airport being
the second-busiest airport in the world in terms of traffic
movements. In 2015, the city hosted over 52 million domestic
and overseas visitors. Among metropolitan areas, Chicago has
the fourth-largest GDP in the world, just behind Tokyo, the
New York City metro area, and Greater Los Angeles; Chicago
is considered one of the most important worldwide centers of
commerce and trade.
Millennium Park, Grant Park & Buckingham Fountain
Walgreens • Morton Grove, IL • 12CENTRAL AVENUE (13,774 VPD)
IL RT 58 / DEMPSTER STREET (42,089 VPD)
MORTON
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Walgreens • Morton Grove, IL • 13Subject Property Photos
Surrounding Property Photos
Demographics
5730 W. Dempster St | Morton Grove, IL 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.
Population
2016 Population 18,544 149,630 499,532
2021 Population 18,916 150,875 504,241
2000-2010 Annual Rate 1.10% 0.24% 0.09%
2010-2016 Annual Rate 0.53% 0.19% 0.22%
Households
2016 Total Households 6,885 55,647 188,418
2021 Total Households 7,024 56,141 190,260
2000-2010 Annual Rate 0.98% 0.15% 0.00%
2010-2016 Annual Rate 0.52% 0.20% 0.22%
-0.45% -0.42% -0.39%
2016 Average Household Income $93,327 $108,072 $109,952
N
Walgreens • Morton Grove, IL • 16Offered Exclusively by
Brad Feller
Senior Director
bfeller@stanjohnsonco.com
+1 312.240.0194 going beyond
IL Lic. # 471007951
Blaise Bennett
bbennett@stanjohnsonco.com
+1 312.777.2449
Brandon Duff
Regional Director
Stan Johnson Company
303 East Wacker Drive | Suite 1111
Chicago, IL 60601
P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
The information contained herein was obtained from sources believed reliable, however,
Stan Johnson Company makes no guaranties, warranties or representations as to the
completeness thereof. The presentation of this property for sale, rent or exchange is
submitted subject to errors, omissions, change of price or conditions, or withdrawal
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