Search
 

Pharmacies Are Changing, But Still Promising Investments

The industry has seen some mergers, and may have a few new players soon, but the overall prognosis is solid.

chi-walgreens-rite-aid-merger (2) Walgreens recently picked up several thousand Rite Aid stores, keeping it the largest chain in the drugstore business.

CHICAGO—The US drugstore industry has undergone a lot of change in the past few years, including several major mergers and acquisitions, and other players could soon enter the market. But whatever uncertainty any of this has caused, cap rates for the largest chains remained relatively steady in 2017. And experts say those rates probably won’t change much in the coming year.

“We do see interest rates going up in 2018,” Chad M. Firsel, president of Quantum Real Estate Advisors, Inc., tells GlobeSt.com, but any impact on cap rates should be modest, partly because there is a lack of inventory available for sale, especially of properties with long lease terms. Quantum, a Chicago-based firm that specializes in investment sales brokerage, just released its latest pharmacy industry retail report. It found that In the past year, rates for Walgreens properties dropped slightly, from 6.10% to 6.08%. CVS stores also saw a small movement and increased from 5.92% to 5.96%. Firsel says cap rates should go up just a nominal amount in 2018, probably between five and 15 bps.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Brian J. Rogal

Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.

More from this author

Recommended Stories

GlobeSt. Net Lease Spring 2025Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.