There are 110 Walgreens in Chicago that are mapped in OpenStreetMap. If a bunch of Walgreens stores are going to close after the company’s acquisition by a private equity firm called Sycamore Partners, what would the redevelopment potential be?


For this analysis I located all 110 Walgreens using a filter in Chicago Cityscape, enabled the real estate data platform’s housing calculator to estimate the number of dwelling units allowed at each location. Then, manually, I removed the stores that were inside larger buildings leaving behind the strip mall-style locations – and a couple of standalone locations without parking lots (like this one in Lincoln Park).
Topline number: the Chicago zoning map is currently set so that if all of the one-story Walgreens stores were converted to housing approximately 3,642 homes could be built.
According to Will Loux, who advises on investing in “triple net” (NNN) leased properties, “Redeveloping these properties in the near term could be challenging due to the nature of the leases Walgreens signs. The leases tend to be long term NNN leases meaning the landlord collects rent while Walgreens is responsible for the majority of the costs associated with property ownership (taxes, insurance, and maintenance), giving the landlord little incentive to negotiate an early termination of the lease even if there are higher and better uses.”
Walgreens stores in Chicago are generally all the same size, with roughly the same size parking lots. But the zoning districts that have been applied to these properties range widely, with some stores allowing over 200 homes and others allowing 9 or 10 homes. Not every property can be expected to be redeveloped in a given year so higher zoning capacities for new housing should be well-distributed across a neighborhood and across a city.
Notes
It’s not a perfect analysis; some Walgreens parking lots are shared with other businesses (like the one at 7510 N Western Ave, where the entire strip mall is zoned to allow 267 homes), and I don’t know how much of that area should be “assigned” to the Walgreens store’s zoning capacity. While some, like 7510 N Western Ave and 3000 S Halsted St, might overestimate the number of homes allowed, there are also some that have an underestimate of homes allowed.
Another example is 1500 W Wilson Ave, where there is a Walgreens store and a Staples store which are owned by the same entity and share a parking lot. Excluding the shared parking lot the Walgreens could be converted to 16 homes and including the shared parking lot the Walgreens could be converted to 41 homes.
Galaxy brain take: including the shared parking lot and the Staples store, the Walgreens could be converted to 89 homes. For the purpose of my analysis I used the 16 homes number.
Probably the single best redevelopment opportunity is the Walgreens next to the Sheridan Red Line station, which is currently zoned to allow 97 homes. A future redevelopment could even include a rebuilt pharmacy and convenience store.
At least two two-story Walgreens store were included:
- 943 N State St
- 3646 N Broadway
- 4801 N Lincoln Ave