CVS (Consumer Value Stores) Health Corp is a pharmacy company that began in 1963 with Stanley P. Goldstein and Ralph Hoagland. Today CVS is a household name in the US, employing over 240,000 people and having approximately 10,000 stores and 1,110 walk-in clinics across the country with strong concentrations on the East and West coasts.
As the largest pharmacy-led healthcare company in the United States in terms of prescription revenue, CVS stores offer excellent investment opportunities both in the real estate and pharmaceutical segment.
Amidst the COVID economy, investing in CVS property was one of the most viable ways to earn income, build wealth, and maintain a solid investment strategy.
Since the pandemic, there’s been a high demand for retail pharmacy investments. CVS outlets have served as COVID-19 testing centers and are contracted to be a significant vaccine distribution site.
The tremendous growth in its sales in the past year is marked by its mass employment spree involving 50,000 new staff and the opening of 100 HealthHub locations.
Moreover, considering that the ageing American population is growing exponentially and is responsible for consuming approximately 30% of prescription medications and 40% of over-the-counter medications, investors can expect to create consistent, long-term revenue streams investing in triple net (NNN) CVS stores.
In a triple net lease, the tenant pays annual property taxes, property insurance, and maintenance costs in addition to the monthly rental amount.
This type of investment is attractive to many investors because it offers more investment flexibility and greater freedom. For instance, consider the following benefits you can derive from investing in triple net properties.
3 Benefits of Investing in NNN CVS Stores
Guaranteed Cash Flow in the Long Term
A triple net structure is considered one of the most secure investments as it provides a stable and predictable flow of rental payments with minimal management obligations.
Since the longevity of the investment comes from the 20-25-year leases, you can expect to collect your rent check consistently for the entire period as opposed to leases that end every few years with landlords searching for new tenants periodically or even leaving their commercial properties vacant.
Moreover, you can allow your profits to accumulate through tax deferments when you own a triple net property. The 1031 and 1033 Tax-Deferred Exchange Code offers investors the leverage to acquire more properties without paying taxes every time.
No Landlord Hassles or Liability Exposure
By owning NNN CVS stores, investors can escape the burdens and time commitments of owning or managing a property. They never have to worry about tenants since they are typically responsible for their maintenance, insurance, and taxes.
Investors also don’t have to bear the liabilities of unexpected expenses. Triple net leases work similarly to stock investing: you buy NNN units from a CVS pharmacy for sale and earn fixed yields until maturity.
Create Diversification Within Your Holdings
NNN investments are also a great way to build equity and expand an investment portfolio. Investors may consider owning properties in several locations with different tenant types, lease durations, and asset classes.
Purchasing NNN assets is relatively a low-risk investment strategy as the business continues to evolve with consumer habits. Therefore, it’s best to have a well-rounded selection of properties that perform differently and provide a range of financial tools to meet your short-term and long-term goals.
The ability to buy, sell, and lease these properties quickly makes triple net acquisitions a strategic, stable investment path to accomplish your goals, whether you’re acquiring outlets in the retail, medical, industrial, or banking industry.
Factors to Consider When Investing
There are a plethora of NNN CVS stores on the market for investing. Are you looking to buy one for passive investment? Here are helpful tips that will guide you in making prudent investment decisions.
Physical Location of the Store
The best triple net properties are those that exist in highly accessible physical locations.
Ideally, it would be best to look for stores in high-density areas with good exposure along major retail arteries with high traffic. And it would help if you also considered the other businesses operating in proximity to the NNN lease property as well.
If there are active proximal businesses close to the NNN CVS store you intend to invest in, it’s a good sign of strong traffic count and consistent human interaction in that area. These proximal businesses can be other consumer staples like fast-food restaurants, grocery stores, bars, and auto parts stores.
These businesses are strong anchors essential for attracting customers to the area, which will benefit your pharmacy store with the established traffic.
Geographical Location of the Store
Prospective investors also need to analyze the state of geographical location to determine a CVS property investment potential. Booming cities and areas with remarkable population growth and economic activity are the ideal markets for triple net properties.
For example, California and Florida are known for their attractive locations and densely populated demographics, so if you can find a CVS for sale in Florida, you can be sure of reliable, long-term monthly income.
Additionally, you might consider looking for small towns with fewer options, urban renewal living areas, university towns, and rural locations with a deficit in community pharmacy outlets. You also want to look for areas with a good tenant demand and positive employment rate increases.
Triple net investments are quite different from other real estate investments. When looking for a CVS store for sale, choosing the best one for your portfolio can be a complex process to navigate.
That’s why you need experienced hands to guide you through the rigors. Contact our experts today to learn more about how your business can benefit from a triple net investment with less risk and more reward.
NNN Deal Finder can help you find and evaluate triple net listings that align with your investment strategy. We are informing, empowering, and connecting investors to the most reliable NNN Properties for sale that regularly generates income.