Not so long ago, net lease investors saw trouble in the drugstore market. Many feared e-commerce providers would gut Walgreens and other well-known brands like they did other brick-and-mortar retailers. And Walgreens’ 2017 acquisition of around 2,000 Rite Aid stores raised the possibility that these outlets would compete with one another and face closure. A failed merger between Rite Aid and Albertsons also increased uncertainty, and transaction volume in the sector fell about 40% over the first three quarters of 2018, according to Wilmette, Illinois-based The Boulder Group. But net lease drugstore buyers are back, and looking for deals. “A lot of those fears were overblown to some extent,” Boulder Group President Randy Blankstein said. Amazon’s $753M purchase of online pharmacy PillPack last year, while not a failure, did not exactly revolutionize the industry, he pointed out. “Customers’ ingrained habits of going to their familiar neighborhood pharmacy has largely won out.”
To find out more about commercial real estate financing and how we can assist you find more information here