Walgreens to close 1,200 stores; 8 REITs report it as a top tenant

In an effort to improve the company's cash flow generation and net debt position, Walgreens Boots Alliance Inc. plans to close approximately 1,200 stores over the next three years.

About 500 of the closures are expected to occur in fiscal 2025, with the activity weighted toward the latter half of the year, the pharmacy and drug retailer announced on its Oct. 15 earnings call. Walgreens Boots Alliance will prioritize closing locations that are cash flow negative, underperforming stores where it owns the locations and ones with lease expirations coming due in the next few years.

Eight US equity real estate investment trusts reported Walgreens Boots Alliance as one of their top tenants in their recent quarterly filings, according to S&P Global Market Intelligence data.

Alpine Income Property Trust reports the largest exposure

Single-tenant net lease REIT Alpine Income Property Trust Inc. disclosed the largest exposure to Walgreens Boots Alliance. As of Sept. 30, the retailer accounted for 9.0% of the REIT's total annual base rental revenue.

NETSTREIT Corp. had the second largest exposure. Its 27 leases with Walgreens Boots Alliance represent $8.8 million in annual base rent, or 5.9% of the REIT's total annual base rental revenue.

Realty Income Corp. had 400 leases with Walgreens Boots Alliance as of Sept. 30, and these account for 3.3% of the REIT's annual base rental revenue.

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Shopping center-focused REIT Acadia Realty Trust reported four leases with Walgreens Boots Alliance, aggregating 68,393 square feet. The leases with the retailer represented $2.9 million in annual base rent, or 1.9% of Acadia Realty Trust's total annual base rental revenue.

NNN REIT Inc.'s 49 leases with Walgreens Boots Alliance, meanwhile, account for 1.8% of the single-tenant REIT's annual base rental revenue.

Shopping center REITs Whitestone REIT, Regency Centers Corp. and Kimco Realty Corp. also reported Walgreens Boots Alliance as one of their top tenants. Leases with Walgreens Boots Alliance accounted for 0.7% of Whitestone REIT's total annual base rental revenue. At Regency Centers and Kimco Realty, which each had 24 leases with the retailer, Walgreens Boots Alliance accounted for 0.6% and 0.5% of annual base rental revenue, respectively.

Walgreens Boots Alliance's global retail store count has consistently dwindled over recent years, falling to 11,936 as of Aug. 31, 2024, from 13,645 five years earlier.