Vacant Pharmacy Buildings
This may be a wandering thought on a slow day, but as more vacant CVS, Walgreens, and Rite AIDS come to Market, what's going to back fill them?
Typically on hard corners with excellent traffic, they seem like a great piece of real estate, but the distinct shape more than likely requires buckets of cash to redo facades, re-demising, etc. Thoughts?
Invariably, all that I have seen have leased to a local, single location tenant. Some have been heavy duty buildouts (ex: multi-bay mechanic shop) and others have been lighter (doggy day care) while others have been leased by discount stores (so no buildout/ modification).
In short, it’s been a pretty meh tenant pool.
Agreed - seems the rents would not be enough to justify unless your basis was super low
It’s the new Pizza Hut. Correct me if I’m wrong, but the pharmacies are all build to suit, typically smaller local developers behind it, and they make their money off the initial 20 year term. If it’s become a great area in those 2 decades, then CVS renews, and if it’s a shit area, then they leave. If it’s a shit area, then it’s not worth tearing it down, and you’ve already made your $ on the original 20 year lease, so you take whatever peanuts you can get from the mom & pop tenant and kick the can another 5 years hoping the area improves enough that it’s worth redeveloping.
I’ve got a use in mind but I don’t know if it works in flyover states. Without giving away secrets… well located corner intersections with low lot coverage ratios probably selling for a decent cost basis when this shitstorm all hits the market at once? Real estate ain’t rocket science, man.
Good luck trying to do IOS pal. Majority of the zoning won’t allow.
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