Industrial Strength Persists
E-commerce structural tailwinds keep industrial cap rates compressed. Institutional buyer demand remains strong despite macro uncertainty. Best-in-class logistics properties trade sub-5% yields.
Essential Retail is Resilient
Grocery, pharmacy, and convenience retailers prove recession-resistant. Long-term leases to A-rated tenants provide downside protection. Cap rates offer attractive income relative to treasuries.
Sector Rotation Ongoing
QSR and specialty retail facing headwinds post-pandemic. Medical office and healthcare service properties benefit from aging demographics. Flight-to-quality favors investment-grade tenants.
Class B Offers Higher Yield
Class B NNN properties trade 50-120 bps wider than Class A equivalents. Regional chains, franchisees, and smaller tenants in secondary markets offer 6.5-7.5%+ cap rates. Investors willing to accept shorter lease terms and moderate credit risk find compelling cash-on-cash returns.
Quality Premiums Expand
A-rated tenant gaps widening relative to B/C operators. Prime markets command tighter cap rates than secondary/tertiary. Investor focus on credit quality and revenue stability drives valuation spreads.