October 28, 2015 Comments Off on Reactions to Walgreens’ Rite Aid Buy Views: 813 California News, National News

Reactions to Walgreens’ Rite Aid Buy

Now it’s official. Walgreens Boot Alliance is buying Rite Aid for $9.4 billion, which is $17.2 billion if the purchase includes the debt incurred.

Connect Media spoke with two retail experts about the transaction and its possible ramifications.

Bill Rose, vice president and national director of Marcus & Millichap’s National Retail Group, said that the transaction didn’t surprise him.

“It’s not a surprise, given that we’re in a cycle of M&A [mergers and acquisitions],” he points out.

When asked about store closings because of overlap between the two chains, Rose said that would likely be the case, but in this retail real estate climate there would be other chains that would likely snatch up any locations that are closed as a result of the merger.

“It will create great opportunities for other retailers,” he said, adding that landlords will have a better credit tenant on their hands and are likely prepared to lease up the potential vacant space.

Meanwhile, Sean O’Shea, managing director of The O’Shea Net Lease Advisory, brings up the fact that Dollar General and Family Dollar are both expanding, and any extra space could give similar chains the opportunities to find good locations.

“We have been mindful of this distinct possibility, on the drug store sector merger horizon, for a while,” O’Shea told us, also pointing out that lease terms will likely change.

Connect With Bill Rose

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