Potential Impacts of a Rite Aid/Walgreens Merger

Fryman: “We are seeing a difference of 100 basis points between the daily-needs driven shopping center versus the experiential retail anchored centers—this is quite significant.”

CORONA DEL MAR, CA—Like with any merger, consolidation creates vacancies, but same-location stores are not a guarantee if and when the impending merger between Rite Aid and Walgreens is approved by the FTC and finalized, Hanley Investment Group’s EVP Kevin Fryman tells GlobeSt.com. Combined, Walgreens/Rite Aid would have a reported 46% US market share.

Fryman recently represented the seller, Parkcrest Construction Inc. A Real Estate Development Co., of Ontario, CA, in the sale of a new single-tenant, absolute-net-lease Rite Aid property at 28995 Newport Rd. in Menifee, CA. The purchase price was $9 million, which represented a cap rate of 4.72%. Fryman says, “The sale of the Rite Aid represents the lowest cap rate for a single-tenant Rite Aid in the Inland Empire ever. It was also one of the lowest cap rates for a fee-simple Rite Aid nationwide.” The buyer, a private investor, was represented by Ron Duong, first VP investments of Marcus & Millichap of Newport Beach, CA.