Pharmacy 1031 Exchange Properties

The deepest inventory and the best corners in town. Buy the corner, not just the logo.

Pharmacies are the deepest pool of single-tenant healthcare properties on the market and a long-time favorite of 1031 exchangers: one tenant, a long lease and some of the best corners in town. They have also been the most debated, with Rite Aid gone, Walgreens private and store closures in the news.

That debate is the opportunity. Americans did not stop filling prescriptions: Drug Channels Institute estimates prescription dispensing revenue reached $751 billion in 2025, up 10% in a year.

Start with your dates, then look at what is on the market today.

Why Pharmacies Work for a 1031 Exchange

Credit, honestly priced. In the pharmacy listings we track, Walgreens stores ask a median cap rate of 7.50% across 332 listings, while CVS stores ask a median of 6.32% across 158. CVS Health is public and rated BBB by S&P and Baa3 by Moody’s. Walgreens went private on August 28, 2025, and its last public ratings were below investment grade, so buyers price in the uncertainty.

Fewer closures than feared. Walgreens still operates about 8,000 locations. Its 2024 plan called for closing 1,200 to 1,300 stores by 2027, but the pace has slowed, and the company now expects to close fewer than 100 stores in 2026. The stores it keeps are the ones it wants.

Exceptional real estate. Drugstore chains bought signalized hard corners with access from both streets, drive-throughs, deep parking and tall signage, in buildings of 8,000 to 16,000 square feet. Hard corners are usually the easiest retail sites to re-lease.

Room for healthcare reuse. A former drugstore can become an urgent care center, clinic, dental or dialysis office, or a plasma center. In the Philadelphia area, KEDPlasma took over a 12,000-square-foot former Rite Aid.

What to Check Before You Identify

Before you identify a pharmacy, compare the rent to what the corner would command from a new tenant, read whether the parent or a store-level entity signed the lease and how much term is left, and look at local competition and closure risk. A converted drugstore needs real capital and the next rent may be lower, so the pharmacy that works for an exchange is the one you would be glad to own if the pharmacy ever left.

Comparing a building to a DST? See when a DST makes sense, and when it doesn’t.

Questions Exchangers Ask

CVS or Walgreens for my exchange? CVS offers investment-grade credit at lower cap rates. Walgreens offers more yield for more uncertainty. The right answer depends on the specific store, its rent and its corner.

Is a short remaining term a dealbreaker? Not if the rent is at or below market and the corner is strong. It does mean you should underwrite the real estate as if the pharmacy might leave.

Sources: Drug Channels Institute, The Top 15 U.S. Pharmacies of 2025; Walgreens Boots Alliance and CVS Health filings, S&P Global Ratings and Moody’s via Investment Grade Research; The Philadelphia Inquirer (December 2024). Pricing and lease term reflect listings tracked by Investment Grade Research and update automatically. This is general information, not tax, legal or investment advice.