I Shut the Walgreens (But I Didn’t Close the CVS)

As SF loses 12 more Walgreens, investment leaders must rethink urban retail strategies: mitigate risks, seize redevelopment opportunities, and navigate the shifting landscape of tenant demand.

Walgreens announced that they’re is closing 12 more stores in San Francisco—part of its nationwide plan to shutter 1,200 locations. I’ve been a customer of theirs since I was ten, so I was kind of bummed to hear it.

These closures aren’t just about one company struggling with high rents or legal settlements; they’re another tremor in a big shift transforming urban economies.

For investment firm GPs, MDs, and IR professionals, this development carries really big implications. Drugstores like Walgreens are the cornerstones of a lot of retail portfolios, offering steady cash flow.

So, when they shut down, there’s bigger structural risks: (1) the rising costs of doing business in urban centers, (2) changing consumer behaviors, and (3) the growing fragility of key tenant categories.

Yet, amid these challenges, there’s opportunities— (1) prime real estate for redevelopment, (2) evolving tenant needs, and a way to reposition portfolios to align with new urban dynamics.

If you’re running a fund and you don’t understand what these closures mean, it’s hard to claim you can really advise LPs on wealth preservation, or really much outside of your niche segment. So let’s talk about what exactly is happening with all of these drugstores shutting down

What Just Happened?

Walgreens began a plan to close 1,200 stores nationwide, with 12 locations in SF set to permanently shutter between February 24-27, 2025. Among these is the high-profile location where Banko Brown was tragically shot, a store that became emblematic of Walgreens’ struggles with urban retail challenges. While the company cites high rents as a primary driver of these closures, the move underscores deeper pressures facing the urban retail ecosystem, including shifting consumer habits, operational inefficiencies, and the rising cost of doing business in dense metropolitan areas.

Why Drugstore Closures Are a Canary in the Coal Mine

Drugstores like Walgreens play a critical role in urban retail ecosystems, acting as both essential service providers and anchors that drive consistent/strong foot traffic to nearby businesses. Their struggles signal larger, systemic issues: rising opex and the challenges of maintaining profitability in cities grappling with urban decay and shifting consumer behaviors.

As the utility of physical retail diminishes in densely populated areas, the ripple effects extend beyond empty storefronts—adjacent businesses lose traffic, community trust erodes, and the vitality of urban neighborhoods is further weakened.

Here’s what the rest of the article will show MDs, GPs and investor relations professionals:

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Before the Paywall: What You’ll Learn Next

The Walgreens closures in San Francisco are more than a retail retreat—they’re a sign of what’s coming for urban real estate everywhere. For GPs, MDs, and IR professionals, this is a moment to reassess strategies and prepare for a rapidly changing market. Here’s what you’ll discover behind the paywall:

1. Why These Closures Are a Canary in the Coal Mine: Learn how Walgreens’ retreat reflects systemic risks that could destabilize urban retail portfolios nationwide.

2. The Risks (and Rewards) of Tenant Turnover: Understand how to navigate the challenges of losing “anchor tenants” while spotting hidden opportunities for redevelopment.

3. What Consumer Behavior Is Telling Us: Explore how the shift to e-commerce and delivery apps is redefining tenant demand and reshaping leasing strategies.

4. How to Reassure LPs Amid the Uncertainty: Get actionable tips for crafting a clear narrative and leveraging data to keep LPs confident in your portfolio strategy.

5. Where the Opportunities Are Hiding: Discover how mixed-use developments, residential conversions, and new retail concepts can transform challenges into long-term wins.

Keep reading to find out how to turn these closures into a strategic advantage for your firm.

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