Great Floors sells real estate portfolio, including Kennewick store

Great Floors, the Coeur d’Alene, Idaho-based flooring chain, sold five locations in a $33 million sale-leaseback deal that includes its Kennewick location.

The portfolio also included Great Floors stores in Coeur d’Alene, Spokane Valley, Lacey and Yakima.

The buyers were mostly 1031-exchange investors from California and Western Washington – meaning they were reinvesting proceeds from other commercial property sales to delay paying capital gains taxes under Section 1031 of the Internal Revenue code.

The Seattle office of Marcus & Millichap represented Great Floors and released portfolio details in early April.

The Kennewick location, 7220 W. Okanogan Place, sold to Ancient Boundary LLC of Angels Camp, California, for a little more than $7 million, above the asking price of $6.7 million. The 26,000-square-foot store cost $1.7 million to build in 2015 and is a neighbor to the Three Rivers Convention Center, Benton County Justice Center and Columbia Center retail corridor.

The deal closed in November, according to Benton County Assessor records.

Great Floors signed 10-year triple net leases with its new landlords, meaning there will be little outward evidence of the change in ownership of the real estate.

The Kennewick store was arguably the most lucrative sale from Great Floors’ point of view because of the aggressive capitalization rate. The cap rate of 4.91%, the lowest of the five, is a sign the new owner buyer is confident the location will be a sound investment.

“The buyer felt strongly purchasing in the Tri-Cities market moving capital up from California, felt very comfortable with the strength of the tenant and with the deal metrics (rent, location, asset type, property use, etc.,” said Chris Edwards, market director for Marcus & Millichap’s Brown Retail Group.

Coeur d’Alene sold for $7.7 million with a 4.95% cap rate.

Spokane Valley sold for slightly more than $8 million with a 5.18% cap rate. Lacey sold for $7.4 million with a 5.35% cap rate and Yakima sold for $2.7 million, with a 4.95% cap rate.

Great Floors operates flooring stores in Washington, Idaho, Oregon and Montana. It employs 400 and boasts annual sales “well in excess” of $100 million.

The combined value of the portfolio sale was $32.7 million, with an average cap rate of 5.07%.

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