After a prolonged period of uncertainty, the CRE market reached a definitive inflection point in 2025. Driven by a resurgence of private capital and renewed confidence, the year closed with $545.3 billion in total transaction volume—a striking 23% year-over-year increase and the strongest performance in recent years.

 

For retail property owners, the recovery has been particularly encouraging. The sector saw an 18% rise in transactions and a 14% increase in dollar volume, signaling a much healthier alignment between buyer and seller expectations.

What This Means for Single-Tenant Drugstore Assets

While the broader retail tide is rising, the performance of Walgreens and CVS properties is increasingly dictated by specific asset fundamentals. The era of uniform valuation is over as today’s market rewards quality and penalizes risk with striking clarity.

Key Trends Shaping Your Asset’s Value

The great divide in cap rates: Investor sentiment has bifurcated.

 

CVS: Remains relatively stable, with cap rates typically ranging from 5.15 to 8%. Long-term leases in prime locations can still achieve premiums in the 4-5% range. The current 12-month average is around 6.55-7.22%.

 

Walgreens: Has experienced a notable repricing due to corporate uncertainty and a larger supply on the market. Cap rates now average 7.9%, with short-term leases, usually under five years, often pricing above 8% and some assets reaching double digits. This reflects a clear buyer’s market, with approximately $2.5 billion in properties available, and this trend is expected to continue.

 

Lease Term is the Ultimate Lever: Remaining lease length is the single most critical factor driving pricing. Long-term, secure income streams command significant premiums, while short-term leases require steep discounts to attract capital.

 

A Disciplined & Selective Buyer Pool: Private investors, around 71% of volume, are actively seeking opportunities but are intensely focused on underwriting. Income is king in this higher-rate environment, making predictable NOI growth—often through rent escalations—paramount for valuation.

Your Strategic Position for 2026

The landscape in 2026 will favor proactive, well-informed decisions. Stability in strip centers and essential retail benefits drugstores, but generic assets will not automatically appreciate.

Immediate Considerations for Owners

Considering a Sale? Buyer discipline means premium pricing is reserved for properties with long leases, strong locations, and clear upside. Preparation and accurate positioning are critical.

 

Planning to Hold? Focus on enhancing your asset’s income profile and lease security to bolster value and refinancing options. Debt offers are sparse for Walgreens property owners, consider paying down existing loan.

 

Looking to Acquire or 1031 Exchange? Significant opportunities exist, particularly in the Walgreens segment, for investors comfortable underwriting specific site-level risks and potential re-leasing.

Actionable Next Step

We specialize in the nuanced drugstore net lease sector. To understand exactly where your property stands in this selective market, we recommend a detailed, no-obligation valuation and market analysis.

 

Let’s schedule a brief conversation to review your specific assets and goals and ensure you are strategically positioned for success in 2026.