Typically a safe haven for investors, sales volume for drug stores over the 12 months ended March 31 in the drug store sector declined 45% to $699M (million) YOY (year over year). On a quarterly basis sales volume of this niche asset class declined 62% to $100M YOY. Sellers of drug stores have reevaluated their expectations slightly, but were still achieving 94.5% of their asking price. Sellers of other single-tenant retail assets lost less ground, but from a slightly lower starting point, achieving 92.1% of their asking price.

Pricing for drug stores has held relatively stable, declining approximately 5% from a year ago to $431 PSF. Other single tenant retail prices gained 3% to $187 PSF YOY. Average cap rates on drug stores increased 24 bps to over 6.5%. Drug stores continue to command premium pricing: the top 25% of assets were priced near $480 PSF with caps approaching the 6.2% mark.

Private buyers and sellers continue to dominate the investor groups, acquiring 72% of assets and disposing of 88% of the volume. Users were significant buyers, acquiring 17% of the volume. The Southeast was the most active region with $195M in drug store property sales and 28% of the total.