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Drug Store Cap Rates at Historic Lows

NORTHBROOK, IL—The Boulder Group has issued a report that shows Walgreens, CVS and Rite Aid have seen significant cap rate compression in the last year.

By Brian J. Rogal | Updated on October 31, 2013

NORTHBROOK, IL—This has been a historic year for single-tenant net leased properties, with cap rates sinking to lows not seen in years. And The Boulder Group, a commercial real estate services firm located in suburban Chicago, has just released a report that shows cap rates for top drug store brands in the sector have fallen since the fourth quarter of last year.

“Properties tenanted by Walgreens, CVS and Rite Aid experienced cap rate compression of 65, 53 and 100 bps, respectively, during this time frame,” according to the new report. “Over $1 billion of drug store transactions occurred in the third quarter of 2013, which represents the largest volume of any quarter in the past three years.”

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