OCF Realty has picked up three standalone Rite Aid stores in Philadelphia with the possibility of eventually using at least two of the parcels as future development sites.
The Philadelphia real estate company bought:
- 801 S. 9th St., which is a 21,000-square-foot site in the city’s Bella Vista neighborhood;
- 1201-43 West Girard Ave., which is a 46,000-square-foot parcel covering an entire block;
- 8130 Roosevelt Blvd., which totals 38,000 square feet at Roosevelt and Solley Avenue.
Heidenberg Properties of Closter, New Jersey, was the seller. The three properties were sold as a portfolio and a sale price wasn’t disclosed.
OCF Realty owner Ori Feibush couldn’t be reached for comment. Feibush does residential development in Philadelphia.
The deal was a year in the making, said Joshua Nadel, who along with colleague Jake Reisman of MPN Realty arranged the transaction. The lengthy negotiation came as a result of Rite Aid having the right of first refusal to buy the properties as part of its leases, Nadel said. Once the pharmacy retailer signed off on that, a deal could be worked out between Heidenbeg and OCF.
Retail properties are increasingly being looked at for new uses as sales shrink, tenants dwindle and owners find opportunities to give them a new life as something else, Nadel said. “Retail properties need to be repurposed and we’re going to see more and more of that,” Nadel said.
They are more often being targeted for their development potential, he said. Single-tenant retail parcels are typically between 20,000 and 50,000 square feet and have ample parking, making them a good size for bigger developments after an existing structure is torn down. In most cases, they are well located in neighborhoods, which is another characteristic making them attractive to developers.
Not all are equal. A dense, urban environment is more conducive to these new uses compared with a suburban location. Many of these single-tenant suburban sites are located on out parcels of strip centers or along a major commercial thoroughfare.
A couple of years ago, Nadel sold a Rite Aid to Alterra Property Group, a Philadelphia development company, at 47th and Chestnut streets in University City. Alterra plans to hold onto it for the remainder of the lease and figure a plan when that time comes.
In the case of the three properties OCF bought, the Ninth Street and Girard Avenue sites “are superior development sites” because of their size and location, Nadel said. The Roosevelt Avenue location will likely remain as a retail site.
“Some of these retail properties have such vehicular traffic that the highest and best use is retail as opposed to development,” he said.
Reporter – Philadelphia Business Journal