Walgreens New Small-Format Store is a Win for Investors
In recent years, Walgreens has steadily pared down growth of their 14,000+/- SF stores in favor of the new 2,500 SF prototype. Many of these stores are relocations of older models with a long history of store sales, giving Walgreens the ability to shift those sales to a store format that is more conducive to current retail shopping patterns and sign new, long-term leases. A combination of store size, building layout, and favorable lease terms makes these relocation stores ideal for real estate investors. With a 2,500 SF building featuring drive-thru access and full vehicular circulation, these buildings are not only a fit for Walgreens but also for the plethora of quick service restaurants (QSR) that are rapidly expanding in the same markets. Investors acquiring these buildings can enjoy a 10-year, NNN, Walgreens-backed lease while having a prototype desirable to many other sought-after QSRs and small-format retailers, many times at a higher rental rate if the buildings were to become available after the initial 10-year lease term. This combination of a long-term, hands-off corporate lease along with a layout that is highly desirable to future users gives retail investors the best of both worlds — guaranteed long-term cash flow with upside in the future.
For more information, please reach out to Kyle Hartung, Vice President and Director of Investment Sales at Goodman Real Estate Services Group, LLC.