A significant but largely overlooked shift is impacting commercial real estate as CVS and Walgreens properties hit the market in large numbers, according to Eric Proos, co-founder of Next Era Legal. The trend is not only about the volume of pharmacy closures, but also the innovative ways these sites are being repurposed by investors.
“We’re seeing a big liquidation of CVS and Walgreens, mostly ones with corporate leases,” said Proos, whose firm has managed several transactions involving these shuttered pharmacy properties this year. “Those are all the deals that we’ve worked on this year.”
Proos attributes the pharmacy sell-off to changing consumer habits and retail economics. “You go in as a consumer and you look what’s on the shelf, and the products there are what, three or four dollars more than if you go to like a Target, or if most people do, like I do, you buy on Amazon,” he said. The combination of declining foot traffic, inadequate store upkeep, and alternative prescription delivery options has made it difficult for these locations to remain competitive.
“You go in, shelves are empty. Everything’s locked up, boxes in the middle of the floor. So it’s just poor performance, lack of traffic,” Proos said. While pharmacy services continue to have some relevance, the retail side has struggled against modern alternatives.
The notable development is not only the closures, but how investors are transforming these properties. “We’re seeing those dark Walgreens or dark CVS get bought up and then value add converted,” Proos said. One client is converting a former pharmacy into an “outdoor kind of pickleball bowling lounge setup.”
These properties offer significant potential. “Those properties have so much square footage, you don’t really see it when you walk into those stores, but there’s a whole second floor office and storage and back area, and most of them have drive throughs,” he explained. These features make them promising candidates for creative redevelopment.
From a legal standpoint, these deals require careful attention to representations and warranties. Proos stressed the need for transaction-specific protections, especially regarding utility transfers and ensuring operational continuity. His firm’s experience with poorly structured pharmacy acquisitions has shaped their approach to safeguarding buyers during these conversions.
This trend reflects a broader movement in commercial real estate toward adaptive reuse and creative repositioning. As traditional retail models face continued challenges, properties with solid infrastructure and adaptable layouts are being reimagined for new uses. For investors open to unconventional ideas, the wave of pharmacy closures offers real opportunities for value creation through strategic conversion.
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