Exclusively Listed Walgreens For Sale
Introduction to Walgreens NNN Property Leases
There are a few different lease types available for Walgreens investments. For example, Walgreens for sale can have absolute and double net leases where the landlord pays certain expenses. In addition, some fees are reimbursable in certain Walgreens leases where the landlord is responsible for costs.
Typically, Walgreens leases signed during the 90s are double net, and newer ones signed in the early 2000s or after will be absolute net leases. The roof and exterior structure are the main landlord costs without reimbursement for a double-net lease. Other unreimbursed expenses to the landlord, depending on the specific Walgreen lease and Walgreens locations that Walgreens purchased, may have varying lease language.
Walgreens’ lease length typically ranges from 20 to 25 years of firm lease term before the options when they were initially executed and will have five-year or one-year options. Some Walgreens leases, as they mature, may be restructured to have a firm lease term of up to 15 years before the possibilities and may have rental increases. Original Walgreens leases usually do not have rental increases; however, certain ground leases may have rental increases.
The Value of NNN Real Estate Quality for Drugstores
The quality of real estate is typically high for drugstore properties located on primary corners in their respective markets. For example, many Walgreens for sale were built-to-suit buildings, meaning Walgreens selected those specific corners to develop within that market. In addition, drugstores are at signalized crossroads with solid access and good traffic counts, enhancing the quality of the underlying real estate.
Most drugstores’ locations occur in dense markets with strong population counts or at a main intersection serving a larger trade area. Therefore, buildings constructed for Walgreens, CVS, or Rite Aid are usually done by preferred third-party developers if not corporate-owned or produced by preferred general contractors. Thus, allowing for the build-outs of Walgreens, CVS, and Rite Aid properties to be consistent and generally constructed well.
Drugstore buildings for Walgreens, CVS, and Rite Aid usually range from 10,000 square feet up to 17,000 square feet if they are freestanding, and some drugstores that are inline can go up to 25,000 square feet. For freestanding drugstores, the land square footage usually ranges from 60,000 to 120,000 square feet. Most drugstores also have a drive-thru for their pharmacy, and considering the buildings as particular use, they are easily repositioned with new tenants if needed.
Corporate Guarantees and Understanding CAP Rates
Drugstores occupied by Walgreens, CVS, and Rite Aid have leases typically corporately guaranteed, which enhance the value of the property since securing the rental income stream by the parent corporation. However, leases sometimes vary depending on the corporate guarantee language, the purchasing location, the state location where the property is, or when initially signing the lease.
Most drugstore leases will be valued similarly even with varying lease guarantor language; however, there are certain exceptions when the value of the property can be affected by weaker lease guarantor language. For example, Walgreens for sale is usually reasonably consistent if Walgreens executed the original lease. Still, some Walgreens leases vary if Walgreens purchased the location and assumed the lease.
The financial strength and size of the lease guarantor play a significant factor in evaluating the CAP rate of the investment. Certain NNN leases with weaker or unknown financial backing for their lease guarantees will have higher CAP rates. Also, if a franchisee does not corporately guarantee the lease, that may raise the CAP rate. Other factors determining the CAP rate will be lease length, lease type, real estate quality, and rental increases.
An Exclusive Focus on Walgreens
Pharma Property Group is the only national commercial real estate brokerage company focusing exclusively on CVS, Rite Aid, and Walgreens for sale. Due to this unique specialization, Pharma Property Group has a superior understanding of the industry, which gives its clients an advantage over other drugstore buyers and sellers.
Some owners of drug stores for sale wish to refrain from marketing to the open public, and some owners will hire a broker. Since Pharma Property Group is so specialized, they can deliver both exclusively listed Walgreens and off-market Walgreens for sale. This access to off-market Walgreens property for sale that Pharma Property Group possesses comes through years of drugstore dealmaking and relationship-building with Walgreens property owners.
Another advantage to Pharma Property Group’s drugstore specialization is that we make our client’s disposition or acquisition process seamless. Our experience in transacting Walgreens properties allows us to represent buyers at the highest level as we qualify Walgreens investments on the front end of a transaction to avoid any surprises, and we can spot any issues with Walgreens before going into contract. We can also effectively represent Walgreens sellers because we know which buyers are genuine through our years of dealmaking, hundreds of Walgreens property sales, and buyer qualifying processes.
Large Inventory of Walgreens Stores for Sale
Pharma Property Group also carries a large inventory of Walgreens for sale. Any listings they advertise to the open public are exclusively listed, with only Pharma Property Group having the rights to sell that asset.
Pharma Property Group also has established an extensive network within the brokerage community to get complete coverage and provide its buyers with full access to all inventory on the market. In addition, Pharma Property Group relies heavily on its outside broker relationships to sell its exclusive stock and to find its buyer’s additional opportunities to purchase.
We also carry an off-market Walgreens inventory for sellers who do not wish to advertise their property on the open market but are available to review offers. This inventory comes from years of building relationships with Walgreens owners. Our off-market Walgreens properties are qualified deliverable drugstore investments that we vet through our underwriting process before we present them to selected buyers. In addition to our off-market and on-market Walgreens for sale, we are aware of upcoming Walgreens properties and selling portfolios soon, so buyers can plan timing certain 1031 exchanges.
Who buys Walgreens NNN Properties?
There are a variety of buyer types that purchase Walgreens for sale. There are REITs, private investment groups, high net-worth individuals, and families that purchase Walgreens NNN properties. These investors can be located throughout the United States and possibly globally, as Walgreens NNN properties have little management.
Some of these investors may be in 1031 trades and use Walgreens as their replacement properties from a prior real estate sale. Most Walgreens owners have experience owning other NNN property investments or multiple drugstore locations.
Buyers are only sometimes located near Walgreens NNN properties near the Walgreens investment, mainly due to the NNN aspect of the leases and the fact that they are easier to manage from afar. Individual REITs or other institutional owners may own multiple Walgreens locations and other NNN assets, as the financial strength behind Walgreens is considered vital. Some investment groups may have funds or certain monies allocated to purchase Walgreens NNN properties for their investors and assist in managing, financing, and the overall long-term strategy of the Walgreens assets.
Can I own a Walgreens store?
Any qualified investor or group of investors can purchase a Walgreens for sale. If the purchase has financing, the buyer must have a 65% loan-to-value or 35% down for the best loan terms and interest rates. Some lenders will give drugstore buyers up to 70% loan-to-value or 30% down; however, the interest rate or loan terms may not be as favorable as if the buyer had lower leverage.
Most sellers of Walgreens properties will want proof of funds or proof of 1031 proceeds when working with a buyer, especially if the buyer needs to gain experience owning other NNN property investments. There are also more minor ownership interests available for investors wishing to invest with institutions or investment groups that purchase Walgreens properties regularly. Specific REITs specializing in NNN properties will also have Walgreens properties in their portfolios, and investors can indirectly own Walgreens properties through holding shares of the REIT’s real estate portfolio.
Most first-time Walgreens buyers have commercial real estate experience and are in 1031 exchanges. Therefore, these investors will use funds from selling other commercial real estate such as apartments, office buildings, land, or other retail properties to purchase Walgreens as their replacement asset for their 1031 exchange.
How do NNN Lease Owners make money?
Owners of NNN properties receive rental income monthly; their net income after expenses is their profit. If the NNN property has financing, the net income pays down the principal of the loan balance and the loan interest. Walgreens for sale typically have few expenses, so most or all of the gross rental income will become the landlord’s net income, depending on the lease type. For example, if the owner has a double net lease and has specific capital improvements such as roof or parking lot repairs, take expenses out of that calendar year’s rental income.
Owners of NNN properties can also profit from the sale of the investment; however, any gains are subject to taxes. Many investors will perform a 1031 exchange to purchase another NNN property to defer any tax payments. On the other hand, some investors decide to sell their NNN property and cash out to accept the gains to reinvest the money elsewhere, which will cause a taxable event. An investor’s CPA should give any tax advice.
What’s the return on investment for owning a Walgreens for Sale?
Walgreens NNN properties typically have a cash-on-cash return of 3.5% to 7%, depending on several variables and risk factors. CAP rates generally range from 5 CAP to 7 CAP depending on market conditions and interest rates. Walgreens for sale is considered a lower-risk investment due to the credit strength of Walgreens and the minimal management Walgreens leases provide. The longer the lease and less management involved will result in a lower return for a Walgreens investment. Conversely, with shorter terms remaining on their leases, Walgreens, weaker sales volumes, or lesser real estate quality will yield higher returns for property owners.
Returns on Walgreens properties for individual investors by REITs, investment groups, or other institutions will vary depending on management fees or acquisition costs. In addition, returns for investors on Walgreens properties or any other NNN property also rely on the market of the purchased property for interest rates, supply, and demand. As a result, specific real estate cycles may provide higher or lower returns depending on the overall investor appetite for Walgreens at that given time when compared to the demand for other NNN properties or commercial real estate.
How can a real estate broker help me?
When purchasing any NNN property, working with a seasoned commercial real estate broker with experience representing buyers in acquisitions for the specific tenant is essential. For example, Walgreens for sale varies greatly in return levels depending on certain risk factors. Using a commercial real estate broker with experience in drugstore acquisitions will allow a buyer to evaluate return levels for certain drugstores available on the market and ensure that the expected return is favorable for the risk.
There are hundreds of NNN properties on the market at any given time. An experienced NNN broker can narrow down the best opportunities for a buyer and provide off-market properties to review for purchase. One of the central values of a strong NNN broker is that they can deliver to buyers off-market acquisitions opportunities that are not available for sale to the open public and assure buyers of the NNN properties’ deliverability.
Many factors, such as title, environmental, and lease documentation, must be reviewed to ensure that any NNN property purchased has a clean bill of health. A good NNN broker can ensure that properties considered for acquisition are qualified correctly upfront to save time and money for a buyer during their review period.
- New lease extension with ±9.75 years remaining.
- Austin-Round Rock MSA location with a population of ±2,200,000.
- One mile from Baylor Scott & White Medical Center
- Affluent demographics and high traffic counts.
- Strong sales with absolute net lease guaranteed by Walgreens with 20-year operating history.
- Busy infill Los Angeles County location on intersection with ±47,336 VPD just blocks from I-605 with ±303,000 VPD and ±679,000 residents in a 5-mile radius.
- Adjacent to Bellflower Middle/High School with ±2,300 students, ±150 staff and one mile from Cerritos College with ±21,000 students enrolled and ±3,500 employees.
- Absolute net lease with zero landlord responsibilities and history of solid sales.
- ±7.5 million square feet of retail space and ±5.2 million square feet of office space in a 3-mile radius.
- High traffic intersection with ±92,000 vehicles per day and over 200,000 residents in a 5-mile radius.
- Chesapeake Regional Medical Center hospital is located ±2 miles south with 310 beds and ±3,000 employees.
- Absolute NNN lease with no landlord responsibilities whatsoever.
- Just 4 miles north of Ohio State University with over 66,000 students and 29,000 employees.
- Riverside Methodist Hospital is about 3 miles south and has 1,059 beds and 5,800 employees.
- Approximately 366,154 residents within a 5-mile radius.
- Absolute net lease with 6.75 years of term remaining, 10 (5-year) options and no landlord responsibilities. Walgreens is reporting a history of solid store sales at this location.
- Existing CMBS non-recourse financing is assumable, debt matures 10/6/26, current balance is $4,200,000 at 4.53% rate.
- CVS is located directly across the street making this a strategic corner for both Walgreens and CVS. No Other Walgreens for 22 Miles.
- Located in the heart of Crawfordsville at the main intersecting roads in the city, North Washington St. and W. Market St. Subject property is approximately two miles south of two medical facilities.
- Can be purchased free and clear or as debt assumption.
- This store reports strong sales and recently added clinic services in 2021.
- Located near Memorial Hermann hospital with 400 licensed beds.
- On the signalized corner with a combined traffic count of ±68,692 vehicles per day.
- Thirteen miles SE of Downtown Houston, infill location with ±142,000 residents within a 3-mile radius.
- Absolute Net Lease with ±8.5 years remaining.
- Across from a Rite Aid and there is no other stand-alone national brand drugstore for 11 miles.
- MyMichigan Medical Center with 96 Beds is located across the street.
- Three senior housing communities within one mile of Walgreens.
- Walgreens is responsible for maintaining the building and guarantees $2,524,995 total rent for remainder of term.
- Located in main retail corridor with 7.9M square feet of retail space within 3 miles.
- Approximately 316,993 residents within a 5-mile radius.
- Zoned RCC in Clackamas County with various development opportunities such as retail, multi-family and office.
- Store is dark but will produce over $2,000,000 of income over the remaining 6.5 years of lease term. Lease buyout is available from Walgreens. Landlord is also open to sublease the building.
- Property can be purchased free and clear of debt or by a debt assumption.
- Highly visible Hwy- 18 and just 5 miles E of I-15. Highway 18 is the main thoroughfare through Apple Valley, part of San Bernardino County.
- One block from Apple Valley Town Hall, Civic Center Park, Apple Valley Police Department, the Apple Valley Conference Center and the San Bernardino County Library
- Former Walgreens building for sale available for owner/user or redevelopment.
- In the heart of Woodruff on Hwy 221/Main Street across from city hall, library and fire department.
- Within 1 mile of Woodruff High, Woodruff Middle and Woodruff Elementary with total of 2,152 students.
- Near Michelin’s largest North America distribution center and only BMW assembly facility in the US.
- Rite Aid recently executed a 5-year lease extension taking the lease out to 10 years with rental increases in the primary term and the options with minimal landlord responsibilities.
- Only national brand drugstore within 3-mile radius and Placer ranks it the busiest Rite Aid of 6 locations in a 15-mile radius.
- 15 years of operating history with strong customer base including the 3,500 employees of the Ford Flat Rock Assembly Plant located just 3 miles south.
- Rite Aid recently executed a 10-year lease extension with increases in the primary term and extension options, including a 11.7%increase at the first extension option.
- This is an absolute net lease with no landlord responsibilities whatsoever and 20 years of operating history with strong customer base.
- Across from Walgreens making this a strategic location and directly on George Washington Memorial Highway, the only thoroughfare connecting to Norfolk-Virginia Beach-Newport News MSA, one of the strongest military bases in the country.
- Rite Aid recently executed a 10-year lease extension with rental increases in the primary term and extension options, including a 13.3% increase at the first extension option.
- 25 years of operations with strong customer base. No other standalone national retail pharmacies within a 3-mile radius.
- Solid employment base within a 7-mile radius including General Motors, University of Michigan, Hurley Medical Center and Mott Community College.
- Rite Aid recently executed a 5-year lease extension taking the lease out to 7+ years with rental increases in the primary term and extension options, including a 9.3% increase at the first extension option.
- Only national brand drugstore within 8-mile radius and only Rite Aid location in a 16-mile radius.
- Across from ±348,000 square feet of retail space, adjacent to Grande Lake Healthcare Center with 45 beds and 3 miles from Grand Lake JTD Memorial Hospital with 140 beds.
Recently Sold Drugstores
- 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.
- 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.
- 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.
- Walgreens extended lease to a firm 15-yrs in August 2022 showing commitment to this location.
- Walgreens is reporting strong sales at this store that has a 15-year operating history.
- Virginia Beach has a population of ±1,500,000 and is the most populous city in VA.
- Near ±23.6M SF of retail space and adjacent to 128K SF center anchored by Lion Food who renewed for 10 yrs.
- CVS has agreed to new 15-year lease with 10 (5-year) options with 5% increases in the options.
- Near 44-bed Central Harnett Hospital and only national brand drugstore in Lillington.
- Centrally located between Fayetteville and Raleigh along Highway 210.
- Lillington is the county seat of Harnett County who employ almost 54,000 employees.
- Absolute net lease with 12 years remaining.
- Affluent area with solid incomes of over $110,000 in 1-mile radius.
- Part of the Virginia Beach-Norfolk-Newport News, VA-NC MSA with over 1,800,000 residents.
- South of Naval Station Norfolk with more than 82,000 active duty personnel and 39,000 civilians.
- 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.