Most drugstores for sale that were built in the early 2000’s or 1990’s have initial 20 year leases with 40 years in options to follow. Many drugstores for sale in the mid 2000’s and after will have initial 25 year leases with 50 years in options. Most of these option periods are 5 year renewal options and occasionally Walgreens will have one year renewal options.

The majority of drugstores for sale also do not have rental increases in the primary lease term and only CVS or Rite Aid have rental increases in the option periods. Due to the lack of rental increases drugstores for sale usually have a higher initial asking CAP rate versus other comparable credit quality that may have increases every 5 years during the lease term.

Some drugstores for sale are absolute triple net with zero landlord responsibilities where all expenses are paid directly by the tenant. Other drugstores for sale may have a double net lease where landlord is responsible for capital improvements to the parking lot, roof and exterior building.

It’s important that buyers of drugstore investments work with a seasoned net leased broker who has experience in sourcing and closing drugstore property for sale. Pharma Property Group (PPG) specializes in providing commercial real estate services to landlords who own properties occupied by Walgreens, CVS and Rite Aid. Pharma Property Group is one of the top brokerage firms in the country in drugstore property closing volume and has an unparalleled drugstore marketing platform providing access to the largest pool of drugstore landlords in the nation.