Long Island Rite Aid landlords allege chain is late on rent. Are more closings on the way?

Landlords at several Long Island Rite Aid locations allege the company is late on rent, prompting concerns that the pharmacy chain will close more stores and leave the landlords scrambling to find new tenants.

Their fears come on the heels of news that Philadelphia-based Rite Aid Corp. is considering filing its second bankruptcy in the past two years and amid reports from across the country about potential store closings. The company didn't respond to multiple requests for comment for this story.

Newsday also reached out to landlords at Rite Aid's 13 locations on Long Island, where the chain shuttered four stores last year. Rite Aid is the third-largest drugstore chain on Long Island, behind CVS and Walgreens.

As of Monday afternoon, most of the landlords had either declined to comment on the situation, couldn't be reached or didn't respond. But two of the property owners confirmed that Rite Aid was behind on rent this month. One property manager in Hampton Bays said he believed they had received a rental payment for April but could not confirm.

Rite Aid missed its April payment at its Kings Park location, according to landlord Tony Tanzi, who said in an interview with Newsday that his contacts at Rite Aid have not responded to his inquiries. 

“They’ve been a really good tenant,” said Tanzi. “We’ve had a good working relationship with them, and I hope they can work through it.”

Tanzi noted that it’s especially disappointing given that the store has been a tenant in his shopping center since 1998. He said he hopes that Rite Aid will pay its rent in the next month.

“I’m hoping they can rectify it in a month or two, but as a landlord, you can’t hold on forever,” said Tanzi, who added that he may have to close the store if  the tenant does not pay. 

Larry Weinberger, whose MGD Investments owns the North Bellmore Rite Aid building, also said that Rite Aid had not paid April’s rent.

“They’re now three weeks late,” said Weinberger. “They’ve been great tenants for 30 years. We hope they survive. They’ve never missed a payment, never skipped a beat. This is a very concerning and unpleasant situation for me.”

Weinberger said that the “radio silence” has been surprising to him, as typically the company has been very communicative.

While the company initially didn’t respond to any of his requests for updates on the late payments, Weinberger did eventually speak to a corporate employee who said employees had been directed not to release any funds for rent, and that they weren’t at liberty to give a reason.

“This doesn't look good,” Weinberger said. “The disturbing part is: Communicate with your landlords, good or bad news. In this situation, the old saying ‘no news is good news’ doesn’t apply.”

'Bankruptcy doesn't solve all the problems'

Rite Aid filed for Chapter 11 bankruptcy in 2023, listing $8.6 billion in debts in its filing with the U.S. Bankruptcy Court in New Jersey. It closed hundreds of stores across the United States, including four on Long Island. The company emerged from bankruptcy in September. However, Bloomberg recently reported that the company was preparing to face a second bankruptcy.

Bankruptcy attorney Ronald D. Weiss of Riverhead, who is not involved in the Rite Aid matter, speculated that holding back rent could be a tactic Rite Aid is using until  it has a long-term plan in place. 

“My sense is that the first bankruptcy bought them some time," Weiss said. "But bankruptcy doesn't solve all the problems."

Pharmacies have struggled in recent years  because of a saturated market and lack of customer satisfaction at stores due to long waits and a chaotic environment, according to a report by consumer analytics firm J.D. Power. Another factor hurting the sector has been a series of multi-state lawsuits related to the opioid crisis, which alleged that the pharmacies filled illegal prescriptions for opioids.

In 2022, Rite Aid agreed to pay up to $30 million to West Virginia to settle a lawsuit alleging the pharmacy chain failed to monitor and report suspicious prescription painkiller orders. 

Rite Aid was founded by Alex Grass as Thrif D Discount Center in Scranton, Pennsylvania, in 1962, rebranded as Rite Aid in 1968 and was the third-largest pharmacy chain in the United States by 1981, according to its website. Today, it ranks as the seventh largest, according to health care trade publication Becker's Hospital Review.