As an investor searches for their next property opportunity, there are many different types of real estate that may jump out as a possibility. From fast food restaurants to strip malls and everything in between, real estate can be a lucrative investment opportunity. In 2021, especially, it can seem like there are many good options for investments. One such investment that can add significant value to a growing real estate portfolio is a CVS for sale.
Drugstores or pharmacies are always necessary. In the lockdowns and stay-at-home orders of 2020, drugstores were one of these few places people were able to go—and one of the places that was able to provide some of the necessities for getting through the year. CVS is a pharmacy and a convenience store all rolled into one, with the ability to pick up cold medicine, milk, and personal care items all in one trip. Because of the major life changes all of society collectively experienced last year, purchasing a CVS for sale is a smart investment for 2021. Read on to find out what you should know about adding drugstore properties like CVS pharmacy to your investment portfolio in 2021.
Tips for Investing in Drugstores in 2021
Drugstores like CVS are a necessity for life, especially in 2021. They offer a variety of everyday items and things that people may need when they fall ill. And this year many pharmacies, including CVS, are on the list to distribute the COVID-19 vaccine. That’s why right now is a great time to invest in a drugstore like a CVS pharmacy. As one of the few truly recession and economic downturn proof industries, pharmacies can make a great addition to an investment portfolio, especially since there are usually zero landlord responsibilities. If purchasing a CVS for sale is something you may be interested in, here are 4 tips for investing in drugstores:
- It’s all about location: Just like investing in most real estate opportunities, the CVS location matters. A pharmacy in the wrong place could spell disaster, so ensuring that you are buying a drugstore that is in a good location is key. What does a CVS for sale in a good location look like? This will vary based on the city or town, but generally speaking, a good location for a drugstore will be near a neighborhood. It will be on a well-travelled main road, busy intersection, or public transportation area. People primarily want convenience when it comes to their drugstores, so really considering if this location is the best fit for the return on your investment is the number one key with a CVS pharmacy.
- Consider the size of the building—and the parking lot: To have a successfully run CVS pharmacy property, several factors come into play when it comes to size: the size of the store itself, the size of the pharmacy waiting area, and the size of the parking lot. The building needs to be a good size for people to browse the aisles and not cause roadblocks in the store—this is especially important as people continue to follow physical distancing practices following the pandemic. If people are waiting for prescriptions or, more importantly, for vaccinations (like the flu shot that has commonly been given at CVS pharmacy or the COVID-19 vaccine as it rolls out to pharmacies), you want them to have enough space to wait comfortably, possibly even with a seat or two between customers or groups. And finally, you want to ensure plenty of parking for employees and customers alike.
- Do your research: When it comes to buying a pharmacy property like CVS or Rite Aid, there are many different things that go into it. In order to see a successful investment with good ROI for you as the investor, you need to know what you’re getting into. This is where research comes in. You or your team of trusted experts should conduct some background research into the listings, the areas or neighborhoods, and the financials of the different CVS locations that appeal to you. A due diligence review of the financials, price breakdown, lease agreements, franchise agreements, or other contracts can help you get a good overview of whether this property is the right fit for you.
- Understand the industry: Now is a great time to buy into the pharmacy industry with a CVS or other big brand. The industry is experiencing growth as people focus more on health, wellness, and personal care. The world as we knew it changed in 2020, but for pharmacies that change was for the better. The demand for the products and services offered by CVS pharmacy and other drugstores rose in 2020, and that demand is expected to continue to rise through at least 2023. As you begin researching which CVS is the right fit for your investment portfolio, you should also take some time to understand the industry as a whole, so you can see how great the potential for growth truly is.
What to Know When Buying a CVS For Sale
If you are ready to begin searching for a CVS for sale to add to your net lease real estate portfolio, there are a few key things you should know or discuss with your real estate team. These questions can be used as starting points for conversations with your trusted circle of partners.
What area do you want to buy in?
This question will help you narrow down the CVS listings to cities or towns, or even specific neighborhoods if you know that. By knowing where you want to buy, real estate professionals can send you listings that are more tailored to your needs. Even if you don’t know the specific area, knowing that you want to buy in a suburb or a small town can help streamline the listing review process.
Did you do some due diligence reviews?
With pharmacies like CVS, there are a lot of governmental regulations that must be followed. In addition to the standard due diligence review that you may be used to doing with real estate investments (like finding information about the current tenant and contracts), additional work is required to ensure that the pharmacy is currently abiding by all the governmental regulations and that the paperwork or licenses required are current. You don’t want to invest in properties only to find out there are major issues down the line.
How long has the CVS pharmacy been in business?
If it’s a fairly new CVS, that will give you insight into how long it may take to see its success really take off. But if it’s been in business for quite a while, it has already built up trust with the customer base. That trust is particularly important with pharmacies, because when it comes to health and wellness, people care a great deal about who they trust. This may be more true in some areas than others, where small towns often place a greater amount of trust in their pharmacy and the long-term stake in the community can be incredibly important.
What timeline are you looking at?
Are you looking to buy CVS properties for sale as soon as possible, or can you wait for the right opportunity? Are you planning to keep this property in your portfolio for a few years, or for the longer term? These are things you should think about and discuss with your team, so that you can decide what opportunity is right for your individual goals with a CVS pharmacy investment. Whatever your timeline may be, it is important that everyone working with you is aware so that all of your expectations can be met.
Work with Real Estate Experts to Buy a CVS
When you’re ready to start the conversations with net lease experts about an investment in drugstore properties for sale, the team at Sands Investment Group can help. We have facilitated transactions of CVS and other pharmacies across the country, ensuring that investors not only find the right opportunity but get the best deal when adding to their portfolio. SIG’s drugstore experts can discuss all the factors and considerations in investing in a CVS pharmacy and help you identify the listings that meet your goals. From single net lease opportunities to an absolute NNN lease and triple net real estate, Sands Investment Group has you covered.
If you’re ready to make a smart net lease buy for 2021 and purchase a CVS or similar commercial real estate properties for sale, our broker team is ready to assist with the growth, expansion and management of your portfolio. Contact the team by calling 844.4.SIG.NNN to get started with your next CVS investment.