Does anyone have any experience developing a Walgreens? I've identified an outlot of a shopping mall that I think would be perfect for one.

Nearest Walgreens is 4 miles away. Town of about 45,000 and that other Walgreens is the only one. This shopping mall is the only mall in the county, of about 200,000 people. 

The lot is 1.62 acres, with great visibility, being on the corner of one of the main entrances to the mall. Four months ago, there were six outlots left to be sold. Now, this is the sole remaining one. 

The lot is listed for just under $1M. 

I've found articles regarding construction costs around the country, with costs ranging from $800K (in 2002), to $3M (in 2004). 

Any advice/thoughts/comments would be greatly appreciated. Some questions I can think of are:

Should I use Walgreens online "New Site Submittal Form" to see if they're interested? If so, at what step should I do that? Should I get the lot under contract first? 

Is there any reliable way to estimate NOI? When is the best time to sell after the Walgreens is open? Immediately, or after a seasoning period to show NOI?

I'd also appreciate any recommended books or resources to learn about the process and what to expect. 

Lastly, is Walgreens still expanding? I know they just closed quite a few stores, and bought some RiteAid stores. The only Rite Aid in this town is directly across the street from the only Walgreens, so that shouldn't affect their decision. The only CVS in town is closer to the existing Walgreens, than to this new site. 

Walgreens is usually brick facade and 10,000 to 13,000 sq ft in size. Being 4 miles away does not mean that much it's the density and quality of the other site. 

What comes into play is how many roof tops there are between locations to support both stores. Corporate Walgreens does not like stores too close as it may cannibalize sales for each location to where each are not profitable.

Cost per sq ft is about 130. It really depends on what finish the city or county requires for the area. Some developers that build lots of buildings can do much cheaper but they have crews and projects running around the clock. So what might take a smaller developer 130 a foot a larger developer doing volume might can do it under 100 a foot with their cost saving techniques.

You need to know current zoning of the lot, if the land is graded and compaction ready, and are utilities already stubbed to the site?

Generally you put it under contract then go to land an executed lease  BEFORE closing on the property. 1 million is not cheap in price and you need to make sure you can get the exit cap rate you desire before selling. Walgreens typically do 20 to 25 year primary lease terms and developers tend to wait 1 year to pay long term capital gains tax or do a 1031 exchange. You will have to check but I think the new tax laws have pushed the 1 year requirement to 3 years now for carried interest.

If the corner is the last lot left then Walgreens likely already has been offered the site and passed. The corner is usually sold first and not last. A gas station such as QT or Racetrac might also be an option. They tend to love corners and are expanding.

@Joel Owens , thank you for all of the information! 

The other Walgreens is on the North side of town, while this site is on the Southern edge of town where all of the new development is happening. So, most of the population of the town is between the two sites. 

The city isn't too particular about finish requirements, but most buildings are just stucco. I would expect construction costs to be on the lower end of that range, as construction in general is usually cheaper there. 

Zoning is already in place, and the lot is graded and compacted. Utilities are subbed to the site as well.

We should be able to get the cap rate we want. A Rite Aid in a smaller town in the county sold at a 5.25 cap a couple years ago. I'll underwrite to a 5.5 cap to be safe. It looks like the average rental rate for Walgreens is $32,000/mo for the area. 

Regarding carried interested, I likely wouldn't raise money for this project, and instead just partner with 2 other people. So we should be fine selling after 1 year. 

I was also considering that they may have passed on the site already. Would we get it under contract first, and then have my broker ask the seller that as part of due diligence?