With the stability of the retail pharmacy industry going strong, Walgreen’s remains a strong, valuable net lease investment with minimal risk. They usually go with choice corner real estate, and prefer parcels of over one acre. This might range up to two acres, given Walgreen’s building dimensions are often around 14,500 square feet on average. Though in some cases construction projects might be smaller or larger, anywhere from 10,800-15k sq. ft. In order to maintain market share against their biggest competitor CVS, they will also extend their initial lease terms to twenty five years, in addition to paying a premium to acquire a valuable real estate site. Recently, 8-10 separate options to renew every 5 years went into effect, even extending lease lengths upwards to seventy five year terms. Interesting to note that after year 25, a yearly right-to-cancel clause is being added to contracts. Now while providing flexibility for Walgreen’s, it was not looked upon favorably by leaseholders. Primarily knowing that financing might be pulled out from beneath them at any given time after the base term expires.

Lowest Cap Rate


Lowest cap rate over past 24 months

Average Cap Rate


12 mo avg with 5+ yr lease term

Average Property & Lease
Average Sale Price $3,000,000 - $8,000,000
Average NOI $175,000 - $450,000
Building SF 13,000 - 15,000
Lease Term 25 Years
Escalations Flat Initial Term and Options
Stock Symbol NASDAQ:WBA




Tenant Description

In 2014, the partnership of Walgreen’s and Alliance Boots formed into Walgreens Boots Alliance, Inc. As a result, they are now the biggest retail pharmacy operation in America and Europe. Their alliance is likely to secure future expansion with aging populations, as they currently have over thirteen thousand store locations in eleven countries globally.

The idea to merge was mutually beneficial, seeing that they could provide their services to the public more effectively. This was by way of lowering costs through wholesaling pharmacological products, and providing better health services on location. These types of interactions were intrinsically part of Walgreen’s company fabric, going back well over one hundred years.


Out of nearly 8200 Walgreen’s locations prior to the merger, Duane Reade stores are also factored into the total. Approximately 85% of this total are leased, and expect in coming years to ‘trim the fat’ by way of closing lesser performing stores. In the same breath, they will take those lost numbers and construct new buildings in different locations.

  • Highly visible real estate
  • Credit is investor-graded
  • NNN leasing, absolute
  • Primary rent fees are expensive No rental increases
  • Rent bumps non-existent
  • Renewal after primary term must include yearly termination option
Founded 1901
Headquarters Deerfield, Illinois
Number of Locations 9,021
Revenue $132.703 B
Company Website https://www.walgreens.com
Key Principal Rosalind Brewer

Compare listings