Re: Walgreens turnkey deal - Posted by ray@lcorn
Posted by ray@lcorn on July 26, 2003 at 10:42:07:
Since you’re asking the question I will assume that you’re not familiar with the Walgreens process. They know within pennies what their building costs, and will tell you which contractor will qualify to build it in your market. They also specify the developer fee, and you (or the approved developer) won’t get a penny more. The only wild card is land cost and site prep, and they will control that through the lease amount.
The first hurdle is site approval by Walgreens… do you have that? Is the site under your control? If not, then you’re at risk to lose the deal to an experienced developer. It is not uncommon for Walgreens to play two or three developers (and sites) against each other in one market in order to get the best deal. If you contact the RE department at WG they may give you the name of a developer or have them call you. Unless you are an experienced developer they will not approve you to build the store.
After site approval, the real fun starts. Negotiating the lease with these folks is a learning experience for everyone. Tip: Don’t try it without legal counsel, preferrably in Chicago, preferrably with prior Walgreens experience.
You’re in one of the most cutthroat areas of the RE biz… tread carefully.