Special Feature: Jason Oppenheim, Selling Sunset | Page 78

How a NNN Lease Can Go Wrong

If you ’ ve kept an eye on the news recently , you ’ ll know that CVS plans to close roughly 900 stores over the next three years as they shift their focus away from their drug store facilities to a more health care based model . For landlords who hold the NNN leases for those particular stores , what began as a low­risk investment has now become a need to reinvest and , in some cases , recoup losses .

While CVS might be at the forefront of the public eye , it ’ s not alone in responding to the changing consumerism market . In fact , industry projections demonstrate “ that if online shopping grows from 18 % of retail sales today to 27 % in five years , it projects that some 80,000 retail stores will close while others may arise .” Why keep the brickand­mortar doors open if all your customers are purchasing from you online ?

This pivot from drug store to healthcare facility also gained momentum with CVS ’ s acquisition of Aetna in 2018 , alongside the possession of Caremark . With the pressure of online prescription drug retailers , CVS began shifting their business model and liquidating many of their brink and mortar locations . For landlords , losing such a large tenant ( and income source ), meant that the search had to begin again to find a quality , long­term tenant . Often times this is a tricky process and in the

Image by mohamed Hassan from Pixabay

face of rapidly growing e­commerce , those tenants may not be as easy to find .

Choose the Right Investment

Here at TFS Properties , Inc ., we foresaw the closing of CVS and Walgreens and advised our clients accordingly . With an eye on the push to drive pharmacy business online , accelerated by the pandemic ’ s impact on sales , it was only a matter of time .

In general , we have steered our clients away from these types of investments and more towards industries that we find are more recession resilient . Changing ways in how consumers spend their money makes it hard to compete , especially where technology is involved . As such , we put our investors into the types of investments that have proved

their resilience during the previous recession as well as the pandemic . Owning a property with recession resilience is something every investor should integrate into their game plan .

We hope you ’ ve found this article helpful in differentiating between profitable NNN lease opportunities . There are many options out there and picking the right NNN Lease can mean the difference between making or losing money on your investment .

For further questions , feel free to reach out to us at 626­551­4326 .

' that if online shopping grows from 18 % of retail sales today to 27 % in five years , it projects that some 80,000 retail stores will close while others may arise .'

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