Dividends

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Walgreens, the largest drugstore chain in the U.S., upped itsquarterly common dividend by 27.3%. It will now stand at 17.5 centsper share; previously at 13.75 cents. This continues a remarkablestreak for Walgreens. Since 1933 it has always paid dividends andfor the past 35 years it has always boosted them. Over the past sixyears, disbursements have grown by an average compound annual rateof 24.3%. There is a reason many consider Walgreens one the moststable investments and its recording does not fail to lend credenceto that notion. Net lease investors should be encouraged by theseresults as they testify to Walgreens continued success and evergrowing popularity among net lease buyers looking for long-termsteady cash flows.

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Store Sales

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June same store sales rose 2% for Walgreens. This marks areversal of declines in the two proceeding months. A 2.2% increasein discretionary sales at the stores front end was highlighted asthe reason. Overall sales increased by 8.4% to $5.67 billion; DuaneReade was not included in same store sales. These trends bode wellfor Walgreens which has always maintained a strong pharmacycomponent (sales increased by 1.9% in June) but has seen front enddiscretionary sales suffer recently due to the recession. Thoughclearly not a substantiated trend, this could represent a positivesign for the future.

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Moody’s Lifts Credit Outlook

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Due to the resolution of the recent prescription plan conflictbetween Walgreens and CVS Caremark, Moody’s has lifted Walgreenscredit out look from negative to stable. The fight, which would ledto two pharmacy chains refusing to fill each others prescriptions,was resolved when Walgreens agreed to participate in CVS Caremark’sbenefits program. This settlement has prevented a “sizeable loss”from Walgreens revenue.

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Jonathan Hipp

Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.