Pharmacy's Comeback Kid

By all accounts, 2014 was a breakthrough year for Rite Aid (NYSE: RAD), and by extension, owners of Rite Aid net leased pharmacies. After struggling for over a decade with structural weaknesses in its business, ranging from accounting scandals to poor acquisitions, the company is finally managing to turn around its operations. All the while making some landlords very, very happy.

Started in Pennsylvania in 1962, Rite Aid became a strong regional chain under its founder, Alex Grass. Alex handed over the reins to his son Martin Grass in 1995, and four years later the company was implicated in a $1 billion accounting scandal. Its debt plummeted from investment grade to junk status in one day. Predictably, cap rates for Rite Aid properties spiked, and throughout the early 2000s, traded higher than CVS and Walgreens.