The recent announcement that Walgreens Boots Alliance will be acquired by Sycamore Partners, marking the end of its nearly 100-year tenure as a public company, is poised to have significant implications for the commercial real estate market. This transaction, valued at up to $23.7 billion, represents one of the largest leveraged buyouts in recent years and will likely reshape the retail landscape, particularly regarding real estate strategies.
A Trepp analysis shows that Walgreens operates over 8,175 stores in the U.S., with the majority being leased rather than owned. The company's strategic approach to real estate typically involves freestanding locations with high traffic counts and presence in strip centers and shopping districts.
However, with Sycamore Partners at the helm, there is potential for significant changes in how Walgreens manages its real estate portfolio, Trepp says. Sycamore may continue or accelerate the existing store rationalization plan, which involves closing underperforming locations. This could substantially reduce Walgreens' real estate footprint, impacting landlords with leases nearing expiration.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
