
Is Single-Tenant Retail Making a Comeback?
In a promising turn of events for the retail sector, single-tenant net-lease (STNL) properties are regaining their allure among investors, signaling a budding optimism in the commercial real estate market. Despite previous challenges such as store closures and varying performance across different retail segments, recent data from Colliers illustrates a robust rebound in the STNL market.
Shifts in the Investment Landscape
According to the latest Colliers report, investment sales have risen significantly in the first half of 2025, with a remarkable 9.6 percent increase in deal volume amounting to $5.7 billion year-to-date. This resurgence highlights a shift in investor confidence and a strategic preference for smaller property options aligning with modern omnichannel retail strategies.
Cap Rates on the Decline
In conjunction with the heightened activity, the median cap rate for STNL properties has stabilized at 6.8 percent, a clear indication of demand surpassing supply. This shift mimics broader trends in commercial real estate, where yields are stabilizing after a prolonged period of uncertainty.
The Future of Retail: Adapting to New Norms
Interestingly, while smaller retailers like Goodwill and HomeGoods are expected to outperform, big-box retailers are not to be overlooked. Companies like Costco are leaning into customer loyalty and value, reinforcing that even larger retail formats can thrive by embracing differentiation strategies.
Thus, the future of retail—irrespective of size—will require agility and innovation. The booming interest in single-tenant retail signals not just a rebound, but also a transformation in how real estate is perceived and utilized in the face of evolving consumer behaviors and economic factors.
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