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Is the Time Right for Rite Aid?

Yes, the time is right for Rite Aid. An investor will obtain an above average yield commensurate with the market’s view of purchasing a Rite Aid pharmacy.

By Jonathan Hipp | Updated on June 29, 2011

Yes, the time is right for Rite Aid. An investor will obtain an above average yield commensurate with the market’s view of purchasing a Rite Aid pharmacy.

There is a very active market for Rite Aids with numerous transactions closing in 2010 and 2011.  A number of these pharmacies are located on the East Coast.  The sales, at cap rates in the 9% range, resulted from the resale of Rite Aids which were originally sold by Rite Aid in 2008.  These transactions closed with relatively long periods of time (greater than 17 years) remaining on their base leases.  The typical buyers have been individuals and smaller investment firms. In general, financing has been provided by local banks.  Cap rates are yielding an approximate 2% premium to comparable CVS and Walgreen locations.

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