CVS Pharmacy Tenant Overview

Net Lease Advisor Tenant CVS


  • Investment grade tenant
  • Corner locations provide access and visibility
  • Generally over 1.0 + acre of land
  • Corporate leases qualify for CTL Financing
  • Essential Retail


  • Some NN leases
  • Flat rent over primary term
  • High rental rates would prove difficult to replace

Earnings Highlights

Earnings Summary
  • Total revenues increased to $174.2 billion, up 10.6% compared to prior year
  • Confirmed cash flow from operations guidance range of $12.5 billion to $13.5 billion
  • Total revenues increased 10.3% driven by growth across all segments.

Tenant Description

CVS Pharmacy is currently the second largest retail pharmacy in the US, behind Walgreens.

CVS continues to deliver new net lease properties to the market. CVS also now boasts a higher credit rating than Walgreens (historically CVS had a lower credit rating than Walgreens) and is considered investment grade with a stable outlook, which improves the value and marketability of corporate guaranteed net lease properties.

Traditionally, CVS leases featured a flat rental structure, however, recently prime locations have been able to demand rental bumps during options - making these properties highly sought after by the net lease investor. The attraction to the investor is likely due to the stability and profitability of the Pharmacy segment as well as the investment grade credit of CVS. The real estate also plays an important driver in these assets, as they are almost exclusively hard corner locations with premiere visibility, and generous access on 1.00 - 2.00 acres of land.

Over the past decade, CVS has signed a variety of lease types. Originally, CVS stores operated under NN leases, holding the landlord responsible for the roof and structure of the building, and in some cases parking and landscaping. These NN leases might provide rental increases as often as every 5 years. However, new leases typically contain flat rents over the primary term, (some prime locations can demand rental bumps) and can vary from ground leases to NN fee simple transactions.

CVS Health Corporation is a publicly traded company on the New York Stock Exchange and has been in business for more than 50 years with the start of first store in Lowell, Massachusetts.

CVS Health Corporation includes CVS Pharmacy which approximately has 9,500 retail pharmacies, CVS MinuteClinic with more than 1,100 walk-in health care clinics, CVS Caremark, a leading pharmacy benefits manager with more than 90 million plan members, and CVS Specialty, a dedicated senior pharmacy care business serving more than one million patients per year, and expanding specialty pharmacy services.

Average Cap Rate
Trailing 12-month average
Average Property & Lease
Average Sale Price $4,467,458
NOI $264,944
$/Square Foot $298 - $558
Building SF 8,000 - 15,000
Lot Size 1.00 - 4.00 Acres
Lease Term 25 Years
Escalations Varies
Stock Symbol CVS
Credit Rating
Moody's Baa2
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
Apex, NC 5.75%
Atlanta, GA 6.10%
Pickens, SC 6.25%
Overland Park, KS 6.73%