Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.
Through the so-called pandemic, pharmacies have been an e-commerce resistant segment of the real estate market. But that could be changing with a new announcement from Amazon.
Amazon Pharmacy
The e-commerce giant announced the launch of a new store, called Amazon Pharmacy, which will allow customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App.
The platform will allow customers to add their insurance information, manage prescriptions and choose payment options before checking out. Prime members will receive unlimited, free two-day delivery on orders from Amazon Pharmacy included with their membership.
Prime members will also be able to access savings on medications at Amazon Pharmacy when paying without insurance and at over 50,000 other participating pharmacies nationwide.
PillPack
Separately, Amazon offers PillPack, which provides pre-sorted dose packaging.
Having bought PillPack in 2018 for roughly $750 million, it is no surprise that Amazon announced its intent to enter the prescription drug market. Based on Amazon’s success in growing the online grocery business with the acquisition of Whole Foods and launching a delivery model being copied by all, Amazon expects to generate revenue upwards of $130 billion by 2025.
Beau’s View
In the short term, I don’t see a significant impact on the net lease pharmacy sector.
That said, CVS Pharmacy and Walgreens have taken note of this giant’s move, and will need to be flexible with their strategies moving forward.
From a dollar volume, drug stores have been one of the most popular sectors in net lease since the so-called pandemic began.
National asking cap rates in the single-tenant drug store sector increased to 6.4% in the third quarter. However, the increase was driven by a shorter average remaining lease term.
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About Beau Beach, MBA CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee and South Florida markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@soldbybeachwood.com