CVS plans to close 900 stores by the end of 2024, but will thriving Southwest Florida be spared from shuttered stores?
Two store buildings in East Naples and one in Fort Myers are for sale but with long-term leases and options, they appear to be part of a business-as-usual plan.
The company isn’t saying which stores will be closing. The buildings that are for sale in fast-growing Southwest Florida may be able to keep their CVS stores through lease extensions.
Store properties at Tamiami Trail East and Rattlesnake Hammock Road and at Shadowlawn Drive and Tamiami Trail East have both been on the market since September. The stores have remained open. The sales come with lease options for CVS Health Corp., which is the largest drugstore chain in the U.S.
In Fort Myers, the 16950 Pine Ridge Road store building is for sale through Matthews Real Estate Investment Services for $5.16 million. CVS has a lease for the 13,813-square-foot building through Feb. 29, 2032, according to the sales flier. Lee County property records indicate the building owner may have requested the information not be displayed.
“We do not provide lists of store closings,” said Matt Blanchette, senior manager, retail communications, CVS Pharmacy, said in an email.
Plans to close 300 stores a year announced in 2021 remain the same, Blanchette said. CVS has 832 stores in Florida, with 54 of those in Southwest Florida, according to data extraction service Scrape Hero.
“We closed 300 stores in 2022 as planned and expect to close an additional 300 stores in 2023 and 300 in 2024,” he said. “The realignment is based on our evaluation of changes in population, consumer buying patterns and future health needs to ensure we have the right kinds of stores in the right locations for consumers. The realignment also supports the evolution of our stores into community health destinations. We haven’t announced any additional closures, beyond the 900 announced in 2021.”
Details about the East Naples stores for sale
The CVS store at 4890 Tamiami Trail went on the market Sept. 29 for $7.7 million. Property records show a Greenich, Connecticut entity owns the 13,824-square foot building, which was constructed in 2004, according to the sales flier from Investment Properties Corp. of Naples. The current lease expires Jan. 28 but CVS recently exercised the first of four five-year options to extend its lease to 2029 at a rate of $37,417.58 per month.
The 13,013-square-foot CVS store at 2515 Shadowlawn Drive – also built in 2004 – has been on the market since Sept. 6 for $7.21 million. Property records show it is owned by an entity from Woonsocket, Rhode Island. The CVS lease expires Jan. 31, 2027, but has four five-year options, according to the property listing. A call to listing agent Brian Brockman with Bang Realty wasn’t immediately returned.
“I would be astonished if a store like this made the list,” Tamiami Trail store listing broker/agent David Stevens said in a phone interview. “It’s just one of the best markets in the country.”
Still, some CVS stores in fast-growing areas have closed, including a store at 13300 E. Colonial Drive in Orlando, which closed April 12, according to WFTV and the Orlando Business Journal.
And a CVS Pharmacy at 3090 S. Monroe St. in Tallahassee closed March 16 after 25 years in business, according to the Tallahassee Democrat.
And the ongoing closings, though more aggressive than in some previous years, are nothing new. CVS in early 2019 closed 46 stores, including a CVS store in North Fort Myers at the southwest corner of U.S. 41 and Pondella Road.
Great for 1031 investors
Stevens said properties such as the two in East Naples with lease agreements are perfect for investors who have recently sold property and are looking to avoid capital gains taxes by quickly buying something else through a 1031 exchange, which allows investors 180 days to make a like purchase.
“These types of priorities in my word are kind of like commodities,” Stevens said. “They are net lease investments. There is a pretty big world of investors operating in a tax code of 1031. … Most of the buyers are doing it because it’s safe and simple. This is a great example of that.”
Stevens said he has had less activity on the property than he would like and attributes that some to high interest rates and some to news from CVS and Walgreens about store closings.
Walgreens, the No. 2 drugstore chain by market share, said during its third quarter earnings call in June that it planned to close as many as 450 stores across the U.S. and U.K. to simplify the business.
“I think the national news and the stories about the CVS and the Walgreens has gotten the investment market a touch spooked,” Stevens said.
A veteran commercial real estate broker, Steven’s isn’t worried.