Walgreens Is Closing 1,200 Stores; What Are The Options For Its Real Estate?
Previous repurposes include a variety of conventional reuses like shoe and grocery stores as well as several unique and unconventional adaptive reuses
Walgreens plans to close ~1,200 of its ~8,500 drugstores over the next three years.
Including 500 stores that will shutter in 2025 alone.
But what will happen to the real estate after Walgreens leaves?
Plenty of adaptive reuse and re-tenanting examples exist of the more than 2,000 stores that Walgreens has already closed over the past decade.
Many of these former drugstores — in rural, urban and suburban markets across the U.S. — have been repurposed for both conventional and unconventional uses.
Such as the six examples highlighted below that include shoe and grocery stores as well as a motorcycle dealership, a convenience store, a car wash and even a proposed multi-tenant strip mall.
6. Shoe Stores
Many former Walgreens drugstores have been backfilled with dollar stores.
But other retailers have also emerged to take this space.
Like shoe stores.
Foot Locker, Skechers and Shoe Show have all opened shoe stores in former Walgreens drugstore buildings.
And as shoe retailers increasingly shift their real estate from regional malls to “neighborhood” sites, former drugstore real estate may be a continued source for new store growth and relocations.
5. Specialty Grocer Stores
While supermarket operators such as Walmart, Kroger, HEB and Meijer have been opening larger stores, small format, “specialty” grocers have also been adding sites.
Like the 168-store Natural Grocers by Vitamin Cottage chain.
The Colorado-based specialty grocer sells organic food, natural body care products, vitamins and dietary supplements in stores that are 10,000 to 12,000 square feet.
It often locates stores in “2nd generation” space previously vacated by other retailers.
Including in this former Walgreens building in Corpus Christi, Texas.
4. Motorcycle Dealerships
The Harley Davidson dealership in Staten Island, New York traces its motorcycle selling history all the way back to 1914.
But when the dealership was sold in 2016, its new owners sought a larger location.
And so they relocated the dealership into a 14,000 square foot building that includes a customer lounge, coffee bar and a dyno center where motorcycles can get a tune-up.
The previous use of the building now home to Harley Davidson of Staten Island?
A Walgreens drugstore.
3. Convenience “C” Stores and Gas Stations
There are elements of Walgreens real estate that appeal to c-store operators.
Many Walgreens stores are situated on 1-2 acre parcels — often premier “hard corners” or signalized intersections with high traffic flow and good access.
They are typically set close to the street and feature prominent signage, a dedicated parking field and even a drive thru.
These real estate attributes led Now & Forever, a regional c-store chain, to convert a former Houston-area Walgreens into a gas station and convenience store.
Now & Forever added a fuel canopy and 16 fuel pumps on the former Walgreens parking lot.
It also converted the ~14,000 square former Walgreens building into a Now & Forever “Plus” store given its larger size as compared to its other c-stores.
2. Car Wash Units
One of the more unconventional adaptive reuses of a former Walgreens?
As a car wash.
Express Wash Concepts, the parent company of CLEan Express Car Wash, has developed dozens of ground-up car wash units.
But it had never developed a car wash via the adaptive reuse of an existing building.
Until, that is, the Board of Zoning Appeals in South Euclid, Ohio issued a special use permit for Express Wash to operate a car wash at a former Walgreens site under one condition:
That Express Wash repurpose the existing Walgreens building rather than demolish it.
South Euclid officials were concerned about granting the use variance as the former Walgreens abutted a residential area and the proposed car wash had the potential to create noise, traffic and odors.
But a car wash that was fully enclosed within the former Walgreens could mitigate those concerns.
So Express Wash put together a plan that carved an entrance and exit out of the front of the Walgreens building.
It then developed a car wash tunnel in the west half of the building while the east half was utilized for indoor vacuum units and detailing stations.
Express Wash ultimately spent approximately $3 million to renovate, redevelop and fixture the former Walgreens building as a car wash.
And it has since gone on to convert additional drugstore buildings into car wash units.
1. Multi-Tenant Strip Centers
While hundreds of former drugstores have been repurposed for individual users, few have been adapted as a strip mall for multiple tenants.
Why?
Well carving up a single tenant Walgreens building for multiple users can result in odd suite sizes, un-leasable space and a lack of parking.
Plus the price to acquire and the cost to repurpose can be quite expensive.
But one developer group has a plan to convert a former Walgreens in the Rochester, New York area into a five tenant strip center for Panera Bread, Chipotle and others.
If they can successfully attract tenants (and deliver the Project in budget), it may just lead to more Walgreens drugstore-to-multi tenant conversions in the future!
