Fueled by an aging population and the demand for generic drugs and convenience, CVS continues to deliver new net lease properties to the market. CVS has annual retail sales per square foot totaling more than $840, compared to the sector average of $680 for its publicly traded peers. CVS also now boasts a higher credit rating than Walgreens (historically CVS had a lower credit rating than Walgreens) and is considered investment grade with a stable outlook, which improves the value and marketability of corporate guaranteed net lease properties.

Traditionally, CVS leases featured a flat rental structure, however, recently prime locations have been able to demand rental bumps - making these properties highly sought after by the net lease investor. The attraction to the investor is likely due to the stability and profitability of the Pharmacy segment as well as the investment grade credit of CVS. The real estate also plays an important driver in these assets, as they are almost exclusively hard corner locations with premiere visibility, and generous access on 1.00 -2.00 acres of land.

Over the past decade, CVS has signed a variety of lease types. Originally, CVS stores operated under NN leases, holding the landlord responsible for the roof and structure of the building, and in some cases parking and landscaping. These NN leases might provide rental increases as often as every 5 years. However, new leases typically contain flat rents over the primary term (though prime locations can demand rental bumps) and can vary from absolute NNN ground leases to NN fee simple transactions.