The drugstore arms race on the Strip is ratcheting up another notch.
Workers are building a roughly 20,190-square-foot CVS store near the southeast corner of Las Vegas Boulevard and Flamingo Road, in front of Bally’s. The two-story property will have a pharmacy and is scheduled to open in May, CVS spokeswoman Stephanie Cunha said.
The store will be open 24 hours per day.
It’s the latest Walgreens or CVS to land in the famed tourist-packed casino corridor, where the drugstores make big money — and pay big rents — selling medicine, food, alcohol and such Vegas-themed souvenirs as shot glasses, margarita cups, ash trays and gallon-sized flasks.
This lucrative slice of commerce on the boulevard is only growing, too.
CVS opened a store last year in the new three-story mall at Treasure Island and now has four outposts in the resort corridor, including the one at Bally’s.
Walgreens, with five stores on the Strip, opened another location last year in a newly built retail plaza just north of the SLS Las Vegas.
“They’ve really been popping up quickly,” said real estate broker Ray Germain, an associate vice president of investments with Marcus & Millichap.
Moreover, investors bought a 1.6-acre Walgreens property on the north Strip for $37 million in October — up 33 percent from what the sellers paid in 2012.
Germain, who brokered both of those deals, said drugstores are convenient for tourists and offer lower prices than casino sundry shops.
“It’s crazy what you’ll pay for a little packet of Advil,” he said of casino stores.
The drugstores book $10 million to $40 million or $50 million in annual sales on the Strip. The Walgreens between the Venetian and the Palazzo, for instance, is rumored to be the top-grossing store in the company, Germain said.
The pharmacy chains pay top-dollar to have throngs of tourists walking by all the time. Their annual rent is about $125 per square foot, or roughly $2 million per year, according to Germain. By comparison, they pay about $300,000 per year in rent for a typical residential store, he has said.
Construction of the CVS at Bally's apparently is being led by Pennsylvania-based Armstrong Development Properties. The company has built more than 400 CVS stores in the United States and has more than 150 in its pipeline, according to its website.
Armstrong is no stranger to Southern Nevada, either. It built 28 CVS locations in the Las Vegas Valley from 2001-09, including 16 stores during the bubble years of 2003-06, its website shows.
Doug Kyle, president of retail development at Armstrong, referred questions about the latest project to CVS, saying, “We work for them.”
Time will tell if the corridor is getting packed with too many drugstores. At some point, Germain said, the “law of diminishing returns” kicks in, and sales could slump amid an over-saturated market.
“Eventually, these tenants won’t be able to afford their ungodly rents,” he said.