Here’s my read on the Walgreens situation- What’s happened- - there’s been a slow decline in retail pharmacy sales for the last two years. - Prescriptions haven’t returned to pre-pandemic levels - Management believes the retail formal is viable, but sees continued pressures on the consumer which will impact stores. - My take? They’re losing market share. What they’re doing- - “customers have evolved, demographics and preferences have shifted, and we need to reposition our stores accordingly” (their words) - they’ve identified 25% of their store fleet are “not contributing” to their long term strategy (my words: unprofitable) - Will evaluate and begin a store closure program for a “significant portion” (but not all) of the 25%. - They’ve also scrapped their Sale Leaseback program going forward. What this means- - They have approximately 8,595 stores in the fleet. That means 2,149 stores are on the chopping block. - Walgreens average lease term on its entire fleet is 9.3 years. So most of these closures will result in dark leases. Who this impacts- - The largest owner of Walgreens is Realty Income, which stood at 369 leases in FY ‘23. Walgreens is their largest tenant in their portfolio (3.8% of total rent) which is roughly $154M in annual rent income. - Let’s assume REITS own 10% of Walgreens properties collectively and Walgreens owns 15% of its fleet. That means 75% of leases are owned by private investors. - 2,149 x 75% = 1,612 properties owned by private investors. Now keep in mind that Walgreens is still obligated to pay rents. But once the leases expire, the challenge for the landlords is replacing in most cases $20 PSF+ in rents. The usual suspect are the dollar stores which have backfilled hundreds of Walgreens - but at rents HALF that.

Just a reminder of a listing we have in the market located in Chicagoland- Here are some of the highlights: - Auto Glass Now is a banner under the Driven Brands umbrella, which operates concepts like Take 5 Oil Change, Meineke, Maaco, and other automotive concepts – with 4,400 automotive locations nationwide. - Auto Glass is the 2nd largest operator in the Auto Glass industry, with 250 locations across 35 states and growing. As we understand from our client, they are in expansion mode. - The asset sits in an infill location in Franklin Park in Chicagoland, situated on a signalized hard corner with traffic counts of 38K vehicles per day – so very good exposure and access to the building - Great price point & yield – offered at $867,000 at a 8.00% cap rate – ideal for a private investor or a 1031 trade. Download the OM here - bit.ly/3TMfR62

We are launching our brand new listing in Austin, TX: a Salad & Go Ground Lease this week. According to our client, this is the 2nd S&G to open in the Austin MSA, and the operator is on a growth tear opening one new location per week. This deal has some really solid deal attributes, including: - Sits in a 3-mile ring that has 88K people, an average income of $145K and has an annual growth rate of 5.0% - The street it sits on (FM 620) in Round Rock has nearly 34K cars that pass by this location, and the pad line up is impressive: McDonald's, Salad & Go, Dutch Bros & Chick-fil-A. - Brand new 20 year lease with 10% bumps every 5 years. We launch today - grab the OM before it hits your inbox - bit.ly/3KgOMnq

Dutch Bros loves lots of rooftops. And as you can see in the aerial, they've got quite the captive audience. We are officially in the market on a brand new Dutch Bros in Allen, TX (Dallas MSA). This deal has a ton of positives that go with it: - Brand new 20-year lease - there's only 6 others in the market with 20 years. - Neighborhood centric - 19K people within 1 mile of this location - earning an average income of $195K. And this Dutch will see 20K vehicles per day. - Don't let that Starbucks scare you across the street - it's in a multi-tenant building with difficult access. Easy in and out for your coffee at this Dutch location. Great 1031 play. Grab the OM here - bit.ly/4dbxHZd @MSpangenbergCRE @NNNIncome