CVS For Sale
There are a number of different types of CVS properties for sale when compared to other freestanding net leased tenants.
CVS property for sale can range in square footage, tenant operations, building type, lease structure and ownership structure. These factors directly impact the value of any CVS for sale and should be considered in addition to the typical valuation factors of real estate quality and lease term remaining before the options. Some CVS for sale are zero cash flow ownership structures where the entire rental payments go to the lender to pay down the debt giving the landlord zero cash flow during the primary lease term. Many times these CVS properties for sale have a rent holiday for CVS at the end of the primary term before the lease options.
These zero cash flow CVS investments are valued completely differently than the typical CVS for sale. Most CVS for sale are fee simple ownership structures; however, there are some CVS for sale that are infill ground lease structures that may have increases in the primary lease term or have larger increases in the renewal option periods versus a typical CVS lease. Another ownership type that is more prevalent with CVS for sale are the leasehold ownership structures. These CVS properties have a ground owner but then also a leasehold position that can become available for sale.
Another differentiator between CVS properties for sale is the lease structure.
Some CVS for sale are absolute net with zero landlord responsibilities and other CVS for sale are double net with varying landlord responsibilities. Of the double net CVS property for sale some have roof, structure or parking lot responsibilities and some may have reimbursable expenses pertaining to common areas if located within a shopping center. CVS properties all have varying business operations which directly affect store profitability.
CVS properties for sale have a minute clinic or are 24 hour operations which are preferred by many net lease investors. Most CVS stores for sale have store operating hours until 8 PM to 10 PM. Some CVS stores may have beer, wine or liquor sales as well.These are all smaller factors that help investors value CVS for sale especially when stores sales volumes are not available to the landlord. If a CVS for sale has a few of these positive subtle differences over another CVS for sale then it provides comfort to an investor in the likelihood of CVS remaining as a tenant for years to come.
In addition to these factors, two main drivers in pricing of CVS property for sale are the primary lease term remaining before the renewal options and the real estate quality. CVS for sale that have over 15 years of primary lease term before the options may trade 125 basis points lower or more versus other CVS properties that have less than 5 years of lease term remaining. As with most net leased properties, the main value is the credit strength of the tenant and the lease in place but obviously all investors regardless of property type consider the real estate quality.
The difference with CVS for sale is that an investor must understand the backfill rent per square foot and compare that with the likelihood of CVS renewing the lease to see if they are purchasing the risk at a fair CAP rate. The factors mentioned in this article will allow any investor considering a purchase of a CVS investment a way to gauge value between one CVS for sale versus another CVS for sale when real estate quality is even. Due to these varying factors in CVS properties for sale it’s important to work with a broker who has a firm understanding of drugstore properties and who has closed a variety of CVS properties for sale.
Does CVS own real estate?
CVS owns some of their real estate that they have either developed internally or purchased through acquiring another pharmacy chain. Over the years, CVS has sold many locations that they developed through sale leasebacks.
How big is the average CVS?
CVS buildings typically range from 9,000 square feet up to 30,000 square feet. Most CVS freestanding buildings are in the 10,000 square feet to 16,000 square feet range. There are some CVS buildings, mostly in California, that are shopping center anchors or supplementary inline space that are over 20,000 square feet.
Recently Sold Drugstores
- Located 15 miles NW of downtown Austin in Round Rock MSA.
- Construction is limited along Hwy. 620 due to proximity to protected wildlife corridors, parks, recreational areas, etc.
- Affluent location with average household income of $160,768 in a 5-mile radius.
- Located on Hwy-580 one of the main thoroughfares connecting western Tampa to the Tampa International Airport and downtown Tampa.
- Near HCA Florida West Hospital with 515 beds and the Mease Countryside Hospital with 300 beds.
- Just 3.5 miles southeast from Tampa Bay Downs which has approximately 24 million visitors annually.
- Outparcel to Target anchored Rolling Acres Plaza in main retail corridor across from Home Depot.
- Two miles from UF Health The Villages Hospital with 307 beds and approximately 1,161 employees.
- Located just south of The Villages, a collection of retirement neighborhoods in central Florida.
- Dense economic region with 7M square feet of retail space, 3M square feet of office space and 2,600 multi-family units within a 3-mile radius.
- Heavily trafficked intersection with traffic count of over 40,000 vehicles per day.
- Affluent neighborhood with about $140,000 household income within a 1-mile radius.
- Located in an infill area on main retail corridor leading directly into Downtown Baton Rouge.
- Located on signalized SEC of Florida Blvd. & Lobdell Blvd. with a combined traffic count of ±77,903 VPD.
- Subject property is an outparcel to a 725,000 SF office park on 5.15 acres.
- Strong sales performance with over a 19-year drugstore operating history.
- Just ±17 miles south of downtown Chicago, part of the Chicago MSA with ±9.6M residents.
- Located on intersection with ±43,000 VPD and one mile east of I-57 running N/S Illinois.
- Philadelphia MSA location with over 6,100,000 residents and 20 miles SE of downtown Philadelphia.
- East of The Shoppes at Cross keys shopping mall on main thoroughfare of retail corridor.
- Walgreens signed a new lease extension showing commitment to this location.
- Located just 15 miles SW of downtown Minneapolis in the Minneapolis-St. Paul MSA.
- Only national chain drugstore in excelsior and traffic counts of over 33,000 vehicles per day.
- Affluent area with median household income of over $120,000 in a 3 mile radius.
- Walgreens reports exceptional sales volumes at this store located in the Los Angeles MSA.
- Affluent HH income in a 5-mi radius of ±$110k and located at a corner with conbined traffic of ±60k VPD.
- Four medical facilities totaling 665 beds are located within a 2.1 mile radius of the subject property.
- 24-Hr store and pharmacy reporting exceptional annual sales with ±13 yrs. remaining on an absolute net lease.
- Walgreens closed the Rite Aid across the street shifting much of that customer base to the subject property.
- Adjacent to Atrium Health Hospital (157-beds) full service hospital.
- One of the best performing Rite Aid stores in the Midwest.
- Rite Aid added 10 years to the initial lease term in June of 2015 with six (5 year) options and increases.
- Roof was replaced in 2015 with a 20-year transferable warranty. Building exterior was also renovated.
- Walgreens has 14 years remaining with ten (5-year) options to extend on an absolute net lease.
- Located directly across the street from a CVS making this a strategic corner for Walgreens.
- Atrium Health Hospital is 2.9 mi away with 101 beds and a 24/7 emergency department.
- Acquired by Walgreens in 2018 and successful operating history of 20+ years.
- 12 years remaining with 2 (5-year) options to extend on an absolute net lease.
- Located just 1.4 miles to the NE of downtown Augusta with traffic counts of 25,000+ vehicles per day.
- Affluent infill location 19 mi. from downtown Chicago, avg. HH income is $112,272 and 260,961 residents in a 5-mi radius.
- Recently extended lease, total of 20 yrs. remaining before the 8 (5-year) options, NNN, 2.5% increases in the options.
- Located 1.4 mi. from Advocate Good Samaritan Hospital with 333 beds and over 3,600 doctors and staff on the signalized SEC of Roosevelt Rd. & S. Westmore Meyers Rd. with a combined traffic count of ±66,355 VPD.
- Located blocks from the Medical District of Memphis with four major hospitals totaling approximately 6.5 million square feet of medical space within a three mile radius.
- Located 2.5 miles outside of downtown Memphis and is part of the Memphis MSA with a population of over 1,340,000 residents.
- Across the street from a Kroger shopping center and near I-69 with traffic counts of over 124,706 VPD.
- High traffic count of 63,111 cars per day and located 3 miles from Highway 99 with approximately 137,000 cars per day.
- Wells Fargo subleases a portion of the space on an absolute net lease basis for an opportunity of supplemental income.
- Average HH income in a 1-mile radius is $79,529, in a 3-mile radius it is $83,335 and $77,942 in a 5-mile radius with a population of 251,698 in a five-mile radius.
- One of only ±400 Walgreens locations with an in-store healthcare clinic.
- Directly across the street from CVS making this a strategic location for both Walgreens and CVS.
- Surrounded by residential neighborhoods and located at Exit 246 of Interstate 10 ±12 miles northwest of downtown Tucson. Average household income is $90,069 in a three-mile radius and $83,659 in a five-mile radius and 281,588 in a ten-mile radius.
- Subject property is located in a two-mile radius of three different hospitals.
- Located in a retail hub with approximately 1.8 million square feet of retail space.
- 50 miles north of Tampa along at the central coast Gulf of Mexico.
- Five mile radius population is 82,480 and household income is $60.598.
- Approx. 13 yrs. of term remaining before 10 (5-year) options, double net lease, landlord responsible for parking only.
- The lease allows for five percent (5%) rental increases in each of the ten (five-year) options.
- The lease structure for this asset does not include a rent holiday.
- Located less than 0.2 of a mile from Russell Medical, a not-for-profit acute care hospital.
- Only national chain drugstore in Alexander City, next nearest Walgreens or CVS over 13 miles away.
- 14+ years of term remaining on an absolute net lease with eleven 5-year options to extend.