Re: NNN Walmart with 8.5 cap rate

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Posted by Grilly on November 20, 2008 at 06:43:45:

In Reply to: NNN Walmart with 8.5 cap rate posted by Prashant on November 19, 2008 at 23:48:46:

I would imagine this is an older store with a lease that might not be renewed when it expires. Good thing about a company like Wal-Mart is that they will continue to pay on a lease even if they move out. A local investor in my area converted an old Wal-Mart to an expo center and it has been very successful. Sometimes other big-box retailers move into vacant former Wal-Mart locations. I've seen an old location split into two units with each unit occupied by a big box retailer. If you know what you're doing, you can make money with vacant Wal-Marts.

You compare the deal you have listed above to buying a Walgreen's at a 6% or 7% cap and it doesn't seem to bad. I wouldn't purchase an old Wal-Mart unless I had deep pockets though.

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