Walgreens Suspends Dividends, Downgrades to Junk Status, Store Closings
In February 2025 we reported that investors in non-traded real estate investment trusts (REITs) should take note of Walgreens’ decision to suspend its quarterly dividend—an event that breaks a nearly century-long streak dating back to the Great Depression, according to an article in Fact Right. The company reportedly cited the move as a necessary step to strengthen its balance sheet and improve free cash flow.
This development followed a series of financial setbacks for Walgreens, including a downgrade to junk status by both S&P (July 2024) and Moody’s (December 2023), an announcement of 1,200 store closures over the next three years, and a multi-billion-dollar opioid litigation settlement.
Walgreens is reportedly a significant tenant in various alternative investment real estate programs, including non-traded REITs and Delaware Statutory Trust (DST) portfolios.
2026 Update: Sycamore Partners Buyout and Continued Store Closures
Walgreens’ situation has changed significantly since its dividend suspension. Sycamore Partners completed its take-private acquisition of Walgreens Boots Alliance on August 28, 2025, ending the company’s run as a publicly traded stock. The new ownership has pursued a “shrink-to-core” strategy focused on the most profitable locations. Walgreens reportedly closed roughly 500 stores during fiscal 2025, and while the pace of closures has slowed under Sycamore, the cumulative 1,200-store closure target now extends into fiscal 2027. In February 2026, the company announced the elimination of more than 600 corporate positions and confirmed the closure of a Houston distribution center effective June 2026.
For landlords and real estate investment programs that depend on Walgreens rent, the buyout has not resolved the core problem. Cap rates on Walgreens-leased properties have risen, lease renegotiations are ongoing, and each store closure leaves a single-tenant property without its income stream. Investors holding non-traded REITs or DSTs concentrated in Walgreens real estate continue to face distribution and valuation risk. If you have concerns about losses in a Walgreens-exposed investment, our FINRA arbitration attorneys offer free consultations.
Some REITs with notable exposure to Walgreens include:
- ExchangeRight Essential Income REIT – 15.9% of annualized base rent (ABR)
- Cantor Fitzgerald Income Trust – 4.3% of annualized rental income
- Alpine Income Property Trust (NYSE: PINE) – Publicly traded REIT with Walgreens as a tenant
- NETSTREIT Corp. – 5.9% of ABR
- Realty Income Corp. – 3.3% of ABR
For investors in non-traded REITs, Walgreens’ financial troubles raise real concerns about what could happen when a major tenant struggles. REITs that rely heavily on Walgreens for rental income could feel the effects, and investors may want to take a closer look at how their portfolios could be impacted.
Cantor Fitzgerald Net Lease DSTs with Walgreens as Tenant
The White Law Group has received inquiries from investors in Cantor Fitzgerald net lease DSTs in which Walgreens stores serve as the primary or sole tenant. These 1031 exchange programs, including CF Net Lease Portfolio III DST and CF Net Lease Portfolio V DST, were sold to accredited investors as passive income vehicles backed by long-term triple-net leases with a national pharmacy chain.
According to SEC filings, CF Net Lease Portfolio IV DST purchased seven retail properties in 2016 that were leased back to Walgreen Co. under 15-year triple-net leases. In 2021, Walgreens waived a termination option in exchange for a $2.7 million payment, extending the lease term to November 2036. Those properties are encumbered by a single CMBS loan with an anticipated repayment date of December 31, 2026 — a refinancing deadline that now arrives amid elevated cap rates and weakened lender appetite for pharmacy-anchored retail. Loans on Cantor Fitzgerald net lease trusts also reportedly contain cash sweep provisions that can trap cash and restrict investor distributions if Walgreens ceases operating at a portion of the properties, files for bankruptcy, or suffers further credit deterioration.
Single-tenant DSTs carry a concentration problem that diversified REITs do not: when the one tenant closes or stops paying, there is no other income to fall back on, and the trust cannot raise new capital to carry the property or fund re-tenanting costs. Cantor Fitzgerald is not the only sponsor with this exposure — ExchangeRight’s net-leased portfolios also count Walgreens among their largest tenants, and The White Law Group is separately investigating ExchangeRight DST lawsuits on behalf of investors. Investors can read more about the Cantor Fitzgerald sponsor history in our Cantor Fitzgerald regulatory overview.
The Risks of Investing in Non-Traded REITs
1. Lack of Liquidity– Unlike publicly traded REITs, non-traded REITs are not bought and sold on major stock exchanges. This means investors may have difficulty selling their shares when they need to access their money. Redemption programs, if available, are often limited, and investors may be forced to sell at a steep discount.
2. High Fees and Costs – Non-traded REITs typically have high upfront fees—often ranging from 10% to 15% of the investment—which can significantly reduce returns. Additionally, ongoing management and operational fees can eat into potential profits, making it harder for investors to see meaningful gains.
3. Valuation and Transparency Issues – Because non-traded REITs don’t trade on the open market, their valuations are not updated daily like publicly traded stocks. This lack of transparency makes it difficult for investors to determine the real-time value of their holdings. Additionally, distributions (or dividends) are not always based on actual earnings, and in some cases, they may be paid from borrowed funds or return of capital.
Broker Due Diligence
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so may be held responsible for any losses in a FINRA arbitration claim.
The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended non-traded REITs to investors. The firm has represented numerous investors who have lost money investing in non-traded REITs and other alternative investments.
How to Recover Walgreens-Related Investment Losses
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Non-traded REITs and DSTs are illiquid, carry high upfront commissions, and expose investors to tenant concentration risk that many retail investors were never positioned to absorb. Firms that recommended these products without adequately disclosing those risks may be held responsible for losses in a FINRA arbitration claim.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. If you suffered losses in a Walgreens-exposed REIT or DST and would like a free consultation with a securities attorney, please call (888) 637-5510 or contact us online.
Frequently Asked Questions (FAQs)
1. How do Walgreens store closures affect DST and non-traded REIT investors?
When Walgreens closes a store or stops operating at a leased property, single-tenant DSTs and Walgreens-heavy REITs can lose rental income, trigger lender cash sweep provisions that suspend investor distributions, and suffer declines in property value. Investors in these programs typically cannot sell their interests to exit.
2. Which Cantor Fitzgerald DSTs hold Walgreens properties?
Cantor Fitzgerald sponsored a series of net lease DSTs — including CF Net Lease Portfolio III, IV, and V — that hold retail properties leased to Walgreen Co. under long-term triple-net leases. SEC filings show at least one of these portfolios faces a loan anticipated repayment date of December 31, 2026.
3. Can I recover losses from a Walgreens-related DST or REIT investment?
Possibly. If your financial advisor recommended a concentrated, illiquid investment without properly assessing your risk tolerance and liquidity needs, or without disclosing tenant concentration risk, you may be able to recover losses through a FINRA arbitration claim against the brokerage firm that sold you the investment.
