Triple-Net Retail REIT Update – October 2024

October 30, 2024

Triple-net retail REITs continue to attract investors with their steady income streams, despite the challenging economic climate. These REITs demonstrate resilience through several key strengths: long-term leases featuring built-in rent escalators, which provide predictable income; a strategic focus on cultivating relationships with financially stable tenants; and the flexibility to adapt their growth strategies. In response to high interest rates and increased capital costs affecting acquisitions, many REITs are leveraging existing resources and offering tenants alternative financing options, such as sale-leaseback and the ability to transact well below the current cost of capital. This adaptability, combined with strong retail fundamentals offering outsized organic growth from existing holdings, has solidified triple-net retail REITs as one of the top-performing asset classes, continually drawing interest from institutional investors.