Triple-Net Retail REIT Update – 2nd Quarter 2024

July 29, 2024

The major headlines across the retail sector at mid-year 2024 highlight a resurgence. Retail real estate fundamentals are clearly strengthening: the June US Store Tracker from Coresight Research notes that planned and announced US store openings for 2024 total more than 4,200. This outpaces store closures by 20 percent and results in an estimated 78 million square feet of new demand. Consumer spending has also remained remarkably resilient despite economic uncertainties, with retail sales in the first quarter of 2024 surpassing expectations. The 5.3 percent year-over-year increase in March retail sales outpaced inflation, indicating healthy demand for goods. As a result, leasing volumes and pricing power for net-leased retail REITs are trending upward, driven by improving demand and limited new supply over the past decade. This positive momentum is expected to continue through the rest of 2024 and into 2025, leading to stronger same-store net operating income (NOI) as new leases come online.