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Real Estate - OCTOBER 28, 2020

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Single-tenant drugstore properties surge

by Released

In the third quarter, national asking cap rates in the single-tenant drugstore sector increased to 6.39 percent, according to the 2020 Net Lease Market Report, by The Boulder Group.

This represented a 17-basis-point increase when compared with the prior year. Cap rates for Rite Aid and Walgreens properties experienced cap rate increases of 19 basis points and 15 basis points, respectively. However, single-tenant CVS properties experienced a 10-basis-point decrease.

“Throughout 2020, net lease investors focused on essential retailers and accordingly the drug store sector experienced a significant increase in transaction volume,” said Randy Blankstein, president, The Boulder Group. “Transaction volume for single tenant drug stores increased by more than 30 percent in 2020.”

According to the report, the main factor for the increase in cap rates for the drugstore sector was a shorter average remaining lease term, which dropped to 10 years in the th

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