Rite Aid’s Final Refill

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Rite Aid is officially gone. Every store. Closed for good.

The once-dominant pharmacy chain has shut down all U.S. locations, marking the end of an era for the traditional drugstore model. The drugstore has officially been dethroned as the market’s premier investment asset

In a previous article, Prescription for Disaster: The Downfall of Walgreens, we covered how the cracks were already forming. Now the collapse is here.

What Happened

Rite Aid’s problems weren’t new. The warning signs were there for years:

• Overexpansion and thinning margins

• Heavy legal exposure and mounting debt

• Rising labor costs and aging stores

• Shrinking reimbursement rates

• Disruption from Amazon, Walmart, and digital pharmacies

The model simply couldn’t sustain itself.

Why It Matters

Hundreds of former Rite Aid locations now sit dark. Few replacement tenants will match the previous rents, especially in the secondary and tertiary locations. The landlords who purchased with sound underwriting based solely upon core real estate fundamentals (read: below market / replaceable rents) will be fine, and may even unlock major upside.

The Bigger Picture

It’s not wise to think you have investment security just because you own the best performing location in the chain. Credit only matters until it doesn’t. Every major retailer has its best store. It’s the bad stores that sink the whole ship. When it goes wrong, the best stores close too. If you relied on tenant creditworthiness and location sales volume as the primary security for your real estate investment, you could be in a world of hurt right now.

Investors who understand and apply core real estate investment fundamentals and stay disciplined in their purchasing will always rule the day.

Walgreens is still closing stores. CVS is consolidating. Amazon and Walmart are expanding. The old pharmacy model isn’t coming back - but the locations will.

Investors need to be prepared with accurate and actionable information. Where is your rent compared to market? What is the trade area vacancy rate? Which new tenants have opened in the trade area recently? Should you sell now before the bottom drops out and move your cash to a more fundamentally sound asset?

The Takeaway

Rite Aid’s downfall is a reminder that nothing in real estate remains permanent. The market rewards those who pay attention early and often.

That’s why we built DealGround - so when tenants start to struggle, you already know which sites hold the next opportunity.

LFG!

The DealGround Team

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