Building Leased to Whole Foods is On the Market

The new building in Fayetteville that’s been leased for the next 20 years to Whole Foods is looking for a buyer, and a couple of numbers relating to the listing caught our attention — and not just the big one, the offering price of $14.54 million.

It’s the small number that really defines the deal as an investment: the 4.75 percent capitalization rate, which is the rate of return on an investment property based on the income that the property is expected to generate.

The net operating income of the 39,963-SF building is listed at $690,773.

Georgia-based S.J. Collins developed the building at 3535 N. College Ave. Construction has recently been completed, and Whole Foods is scheduled to open on March 4, so whoever invests in the property will have benefit of a full, 20-year lease term.

But as cap rates for new construction properties with long-term leases continue to decline, one real estate source tells us to expect 1031 exchange buyers and private investors to remain the primary buyer.

Institutional investors or real estate funds may not be completely out of the picture on this particular deal, but that’s a complicated subject that may not have a correct answer. 

The building, incidentally, is being marketed by national firm Cushman & Wakefield.