Rite Aid is Bankrupt (Again) And 1,200+ Drugstores May Close; Where Are These Sites And What Are The Repurpose Options For The Real Estate?
Rite Aid's ~1,240 drugstores are located across urban, suburban and rural areas but ~80% are in just 5 states; repurposes of its 800+ previous closures hint at what might be next for the real estate
Earlier this week Rite Aid filed for bankruptcy.
Again.
Rite Aid had closed ~800 of its drugstores during its previous bankruptcy in 2023.
But this time all of Rite Aid’s ~1,240 remaining stores are expected to close for good.
So what happens next to the soon-to-be-vacated Rite Aid real estate?
The closing Rite Aid stores are concentrated in just a few states and regions:
More than 1/2 of the Rite Aid drugstores are in Pennsylvania (~349 stores) and California (~348)
~180 of the stores set to close are in New York state
~140 are in Oregon and Washington
The remaining ~20% of Rite Aid drugstores are spread throughout several states in the Mid-Atlantic and New England.
Even though the Rite Aid sites are located in just a few states, they are spread across urban, suburban and rural locations.
The closings could result in over 10 MM square feet of vacant real estate and follow the millions of square footage that was vacated in Rite Aid’s 2023 bankruptcy.
So what are the repurpose options for this vast amount of former Rite Aid real estate?
Clustered In Certain States — But Different Locations From Its First Bankruptcy
The store closing impact of Rite Aid’s second bankruptcy is different from its first bankruptcy.
After Rite Aid filed for bankruptcy in October 2023, ~50% of its ~800 store closures were clustered in just two states:
Michigan and Ohio.
To be sure, Pennsylvania and California were both impacted by the first Rite Aid bankruptcy as ~100 Rite Aid stores were closed in both states.
But more than three quarters of the Rite Aid drugstores in Pennsylvania and California survived the Company’s initial bankruptcy.
Not so this time around.
The good news?
Many Rite Aid drugstores that were closed during its first bankruptcy (or earlier) have been — or are in the process of being — repurposed for other uses.
These recently completed projects may offer landlords, real estate brokers and prospective tenants examples of how they might pursue the backfill, repurpose or adaptive reuse of the former Rite Aid real estate.
Real Estate Characteristics of Former Rite Aid Drugstores
As to the real estate that Rite Aid is leaving behind?
Most stores are 10,000-15,000 square foot, freestanding buildings with relatively proportional frontage and depth.
They are generally located on 1.5 - 2 acre parcels, often at “hard corners” — or premier signalized intersections with high traffic flow and good access.
The stores are typically set close to the street and feature prominent signage, a dedicated parking field and a drive thru.
But because the former Rite Aid stores are spread across urban, suburban and rural locations — not to mention geographies ranging from California and the Pacific Northwest to the Mid-Atlantic states and New England — there will likely be significant differences both in user demand and the pace of re-tenanting.
Dollar Stores Have Been A Common Backfill — But Perhaps Not Anymore
Dollar stores have been perhaps the most frequent taker of drugstores that closed in the years prior to the Rite Aid bankruptcy.
These backfills occurred in urban and suburban markets.
But they were perhaps most appreciated by landlords in small towns and rural markets where there are generally fewer tenant prospects.
Like this former Rite Aid in the ~5,000 person city of Algonac, Michigan that was recently converted by Dollar General into its DG Market store concept.
Dollar General, however, has recently delayed many new store openings to focus on remodeling its existing stores.
And Dollar Tree is closing nearly 1,000 of its Family Dollar stores and has instead acquired 148 former Party City leases to facilitate near-term store growth.
New Rite Aid Uses in the Suburbs
Other retail categories have stepped in to take many former Rite Aids.
Though some uses are more prevalent in particular states, regions and areas.
For instance, ethnic grocers have opened in several of the vacated Rite Aid drugstores in suburban Detroit, Michigan.
The compact size and “neighborhood” locations of former Rite Aid drugstore buildings — particularly near to the diverse immigrant and first generation populations in many Detroit suburbs — have appealed to ethnic grocers.
A different type of adaptive reuse is also taking hold in the suburbs:
The repurpose of former Rite Aid drugstores as enclosed express conveyor belt car wash units.
Express Wash Concepts has made the repurpose of former Rite Aid buildings and site a key part of its new car wash development focus.
Express Wash often seeks out former drugstore buildings when it is looking for potential sites in one of its markets.
The Company has already converted a pair of former Rite Aid buildings in the Pittsburgh area into car wash units and it is in the process of converting a Metro Detroit-area Rite Aid into a car wash as well.
“One-Off” Rite Aid Conversions in Small Cities and Rural Areas
While certain retail categories — like ethnic grocery stores and car wash companies — have repurposed multiple Rite Aids in suburban areas, conversions of small-town and rural Rite Aid drugstores have generally been ”one-off” projects.
Many have, however, been quite unique.
For instance, a former Rite Aid in the ~11,000 person City of Lincolnton, North Carolina town was repurposed as its police station.
The adaptive reuse of the Rite Aid building was completed quickly and at a fraction of the cost of new construction.
Plus the location was appealing — the former Rite Aid was directly across from the old Lincolnton Police Department headquarters.
Another creative small market conversion was the repurpose of a 15,000 square foot square foot former Rite Aid in Picayune, Mississippi as Fitness Depot, a locally owned and operated gym.
The drugstore-turned-Fitness Depot is one of the largest fitness centers in the ~12,000 person city.
Yet another small town Rite Aid store in Ohio is expected to be repurposed as a health care facility.
Mary Rutan Health operates a hospital that serves five counties in rural central Ohio.
It also operates community clinics in its coverage area.
One of the newest Mary Rutan Health Centers is expected to serve the small village of Russells Point, Ohio (population ~1,300) — in a ~10,000 square foot repurposed Rite Aid drugstore.
The pace at which the former Rite Aid buildings are re-tenanted is not likely to be quick — or even consistent — in all states and regions.
Or across the Rite Aid sites in urban, suburban and rural areas.
For instance, while certain retailer categories may pursue clusters of locations in the suburbs — like the ethnic grocery stores in Detroit or the car wash units in Pittsburgh — demand in tertiary markets and rural locations is likely to come from local and “one off” users on an ad hoc basis.
Another issue that will impact the timing and re-use of former Rite Aids is the fact that many are owned by individuals rather than large developers or institutions.
Individual owners are generally not — and do not want to be — in the real estate business.
Many are not capitalized to fund re-tenanting costs and struggle to attract new users or develop a plan for the real estate.
Additionally, “creative” conversions — like into police stations, health centers and car wash units — may require zoning modifications or municipal approval periods that can be lengthy.
One other critical issue looming over the influx of additional Rite Aid real estate?
Excess supply.
While many former Rite Aid repurposes have been completed or are in process, hundreds of sites are still vacant.
So the influx of another 1,200+ additional stores on the market will likely extend the re-tenanting period of all vacant drugstore sites.
Ultimately the reuse and redevelopment of the shuttered Rite Aids will vary from market-to-market and by region and geography.
But the good locations and real estate attributes of many former Rite Aid sites have already enabled many tenant backfills and unique adaptive reuses.
As to the best path for landlords, real estate brokers, retailers and others to generate ideas to re-tenant or repurpose former Rite Aid stores?
It may just be to follow the examples of stores that have already been repurposed!
1,200 Rite Aid closures don’t just represent retail fallout,they represent a once-in-a-cycle opportunity for adaptive reuse at scale.
These boxes check all the real estate fundamentals: prime corners, high-traffic arterials, ample parking, and built-in infrastructure (often with drive-thru). From a development standpoint, they’re low-barrier, low-lag assets,perfect for capital-light expansions in food & beverage, wellness, last-mile logistics, or even modular healthcare.
But here’s the constraint: many of these assets are mom-and-pop owned, with no institutional playbook or re-tenanting capital. That’s where the market needs matchmaking ,aggregators, REITs, or local investment syndicates that can underwrite, entitle, and reposition at scale.
We’re not just talking about filling empty stores,this is about decentralizing services, increasing neighborhood density, and reducing the carbon footprint of ground-up builds. It’s urbanism, but backwards,from vacancy back to value.