CVS NNN Net Lease Quick Stats
| Metric | Figure |
|---|---|
| Credit Rating(s) | S&P: BBB (Negative, 12/31/24); Moody’s: Baa3 (Stable, 12/31/24); Fitch: BBB (Negative, 12/31/24) |
| CVS Investment Grade | Investment Grade Credit Rated Tenant |
| 2025 Avg Cap Rate | 6.44 % |
| 10 + Year Cap | 5.92 % |
| Properties on Market | 144 |
| Average Sale Price | 5.5 M USD (median) |
| Rent Bumps | 5 % every 5 years |
| Store Count (US/Global) | ≈ 9,700 / ≈ 9,730 |
CVS Pharmacy Business Snapshot
Founded in 1963 in Lowell, Massachusetts by Stanley P. Goldstein, Sidney Goldstein and Ralph P. Hoagland III, CVS began as Consumer Value Stores before Kellogg’s‐owned Melville Corporation acquired it in 1969. The company went public on the NYSE under “CVS” in 1996, rebranded as CVS Caremark in 2007 and again as CVS Health in 2014 when it ceased tobacco sales to align with a healthcare mission. Landmark inflection points include the 1990 Peoples Drug acquisition and the $69 billion Aetna merger in 2018, positioning CVS as America’s largest retail pharmacy and health services innovator.
Today, CVS Health reported full-year 2024 revenue of $372.8 billion, up 4.2 % from 2023, with a three-year revenue CAGR of 8.44 %. The company operates 9,135 CVS Pharmacy locations (all corporate-owned) across the U.S., including 900+ MinuteClinic and in–store clinic formats. Looking ahead, CVS is integrating Oak Street Health primary care clinics, expanding telehealth and digital pharmacy platforms, and investing in CostVantage and TrueCost initiatives to optimize unit economics and drive margin recovery.
(NYSE: CVS) View stock quote
CVS Pharmacy Credit Rating & Financial Health
CVS retains investment-grade status—BBB (S&P, Negative), Baa3 (Moody’s, Stable), BBB (Fitch, Negative). Net debt/EBITDA finished 2024 at 5.1× after refinancing 3 B USD of notes, extending maturities and shaving coupon by 28 bps. Liquidity tops 14 B USD; interest coverage approximates 6.2×. Agencies cite Medicare Advantage margin pressure and Aetna integration risk; mitigating factors include robust free cash flow and real-estate monetization potential.
No franchising exists, so every lease carries a CVS Health guarantee. If investors encounter pad or sublease structures, they should request estoppels confirming parent liability and review rent-to-sales below 8 % with prescription counts above regional medians.
CVS Pharmacy Net Lease Structure & Economics
Fee-simple NN leases (~ 85 %) place roof and structure on the landlord while CVS covers taxes, insurance, and CAM; base term 25 years with ten 5-year options and 5 % bumps at each option. Ground-lease NNN deals (~ 15 %) are absolute; terms run 20 – 25 years with a 10 % bump at 7.5 years followed by 7.5 % every five; ground leases price 40 – 60 bps tighter thanks to land ownership and programmed escalations. All formats carry a full CVS Health guaranty.
CVS Pharmacy 2025 Cap-Rate & Pricing Trends {#cap}
Cap rates drifted higher for a third straight year, moving from 6.21 % in 2024 to 6.44 % in Q1 2025 as investors demanded wider spreads over a volatile Treasury curve. Pharmacy supply contracted 4 %, yet CVS listings slipped just 2 %, tempering compression. Core HealthHUB conversions in major metros still clear sub-6 % yields, while legacy stores flagged for closure trade in the high-6 % to low-7 % range. Compared with 2022’s 5.85 % average, today’s pricing reflects 60 bps of upward reset driven by stronger risk-free rates, selective buyer appetite, and the need to underwrite store rationalization risk.
CVS Pharmacy Real Estate Prototype & Site Selection
CVS’s “neighborhood health hub” strategy overlays clinic utilization forecasts onto classic prescription metrics, refining location science beyond simple traffic counts.
- Building 10,000 – 14,500 SF, steel/CMU, dual-lane drive-thru
- Lot 1.5 – 3 acres, 60 – 70 stalls, hard-corner signalized frontage
- Traffic 25k – 40k VPD with balanced day-parts
- Demographics ≥ 50k residents within 3 mi; median HH income 55k – 75k USD
- Co-tenancy grocery or medical office synergies elevate script volume
- Design flat roof, modern fascia; ~ 20 % GLA allocated to MinuteClinic rooms, tele-health pods, and pickup lockers
CVS Pharmacy Expansion Pipeline & Strategic Moves
CVS will close the final 300 stores of its 900-unit consolidation by Q4 2025 while debuting 12 pilot HealthHUBs across Phoenix, Austin, and Tampa. A further 30 sites are in permitting for 2026, and more than 1,000 legacy boxes are slated for clinic-and-digital retrofits. Capital allocation favors primary-care acquisitions and Medicare Advantage expansion over raw unit growth, pointing to a 2 – 3 % net footprint contraction through 2027 offset by higher revenue per square foot and deeper insurance cross-sell.
Pros & Cons for Investors
- Pros
- Investment-grade corporate guaranty on long-duration leases
- Essential healthcare demand yields recession-resilient rent coverage
- Fixed escalations in ground leases hedge inflation
- Cons
- 5× leverage could pressure ratings if synergy targets slip
- Closure program raises dark-store risk in marginal trade areas
- Medicare Advantage margin volatility may weigh on credit
Comparable-Tenant Benchmarks
| Tenant | Credit | Avg Cap Rate | Avg Sale Price |
|---|---|---|---|
| CVS Pharmacy | BBB / Baa3 / BBB | 6.44 % | 5.5 M USD |
| Walgreens | A / A2 / A | 7.23 % | 6.3 M USD |
| Rite Aid | Caa2 / — / D | 7.73 % | 3.7 M USD |
| Dollar General | BBB / Baa3 / BBB | 7.07 % | 2.2 M USD |
| Kroger | BBB / Baa2 / BBB | 5.50 % | 14 M USD |
| Tractor Supply | BBB / Baa3 / BBB | 6.17 % | 6.0 M USD |
FAQ
Q) What is the current CVS cap rate for NNN properties?
A) 6.44 %.
Q) What is CVS credit rating?
A) BBB (S&P) / Baa3 (Moody’s) / BBB (Fitch).
Q) What is the average sale price for CVS net lease properties?
A) Around 5.5 million USD.
Q) How long are typical CVS NNN leases and rent escalations?
A) 20 – 25 years with 7.5 – 10 % bumps every 5 – 7.5 years.
Q) Who are off-market CVS buyers?
A) 1031 exchangers, pharmacy-focused REITs, and family offices.
Looking to acquire or invest in a CVS asset?
We help you (and your partners) find funds, analyze opportunities, and acquire net-leased, fully managed, investment-grade income properties.
Need capital?
We can fund acquisitions, recapitalize portfolios, or arrange cash-out refinances for existing CVS or other NNN properties.
Looking to sell or exchange a CVS?
If you have an existing off-market CVS (or other NNN asset or portfolio), our Capital-Markets & Acquisitions desk works with private investors, family offices, and equity partners actively seeking off-market acquisitions.
📩 Contact team@investmentgrade.com for tailored advisory and options.
