Harrison Net Lease Capital

A few takeaways:

-Walgreens Boots Alliance is closing 150 Walgreens stores in the US and 300 Boots stores in the UK as part of cost-cutting efforts, aiming to save $800M in 2024.

-The company reported a significant decline in net earnings in the third quarter due to lower operating income, primarily attributed to reduced consumer spending and decreased demand for COVID-19 services.

-Walgreens administered 83% fewer COVID-19 vaccines and tests compared to the previous year, reflecting a decrease in patient willingness to vaccinate.

-Despite an increase in top-line revenue, the US Healthcare segment reported an operating loss of $172M, primarily due to slower-than-expected profitability from recent acquisitions and expansion efforts.

Walgreens to Close 150 Stores | GlobeSt The retailer says the vaccine business is disappearing and that U.S. Healthcare unit not profitable.

This is an interesting and well-written article highlighting some of the factors currently at play in the macro economy which are having a direct impact on the Commercial Real Estate (CRE) market. While concerns in the banking world, particularly among Regionals, have been widely reported, the looming question is how this will affect the wall of CRE loan maturities coming due in the next 12-36 months.

The Office sector is also facing a rapid decline due to the work-from-home trend, which has significantly altered our way of life and the way we interact with CRE across all sectors. But what about other asset classes in the market? How are they positioned to withstand this cycle?

The Credit Crunch That’s Strangling Commercial Real Estate The credit crunch will deepen and extend value declines and losses in commercial real estate. Click here to read my thoughts.