PRO Perspective: The Pharmacy Net Lease Market

In a two-part series, our 8/26 and 9/2 PRO Perspective episodes featured Brandon Hanna of Encore Real Estate Investment Services discussing more CRE opportunities in the pharmacy market.

Crexi’s PRO Perspective series explores various aspects of the commercial real estate industry in conversation with some of the top CRE professionals in the industry. In each episode, we feature different guests to tap into their wealth of CRE expertise and explore the latest trends and updates from the world of commercial real estate. 

In these episodes, Crexi’s Yannis Papadakis joins Brandon in a two-parter, deep-dive exploration of historical trends, current happenings, and future potential in the pharmacy net lease market.

What are net leases?

Net leases are an agreement between a landlord and tenant of a property. The tenant agrees to pay either all or a portion of taxes, insurance costs, and maintenance fees for a property as included in the total rent. In a net lease, the tenant is expected to manage all expenses of maintaining the property, as though the tenant were the property’s owner.

Key Takeaways

• One fundamental of pharmacy net leases is the advantage their optimal location provides. These retail assets are typically at main-on-main locations with high volume points of ingress and egress, and plenty of parking — all of which are elements that boost market desirability.
• Drive-thrus have become critical to pharmacy operations currently, allowing for high-traffic sales volume to continue while protecting pharmacy shoppers’ health and safety.
• Over the last ten years, drug stores and pharmacies have shifted focus from front end/back end operations to creating “wellness experiences” such as offering in-store clinics, adding higher value, branded items, and (like CVS) acquiring insurance companies.
• Mom and pop shop pharmacies are seeing more significant impact than national chains post-COVID, even though these larger brands are consolidating physical assets to stay ahead of consumer behavior shifts.

Check out both episodes here:

About Brandon Hanna:

Brandon Hanna is Co-founder and Managing Partner at Encore Real Estate Investment Services. Brandon oversees a team of seasoned investment professionals focusing on the client advisory of acquiring and disposing of net leased and multi-tenant retail assets throughout the United States. 

Throughout his 12+ year investment brokerage career, Brandon has broken price per square foot records and cap rate records in nearly every market in which he’s worked. Brandon is a proven leading advisor and strategist, with clients including some of the most notable developers, institutions, and private investors in commercial real estate. Brandon has managed more than 400 transactions in 40 states valued at over $2 billion and more than 80 loan assumptions. 

Before founding Encore Real Estate Investment Services, Brandon began his career at Marcus & Millichap, where he exceeded a multi-billion dollar sales total by age 29. 

About Crexi:

Crexi is a commercial real estate (CRE) property marketing and deal management platform that combines an active marketplace for sale and lease properties with powerful property marketing, deal management, and market intelligence tools designed to help brokers, buyers, and tenants eliminate time-consuming processes and close deals faster.