Even after several quarters of net relinquishment, the single-tenant net lease retail market continues to show surprising strength. Food-oriented tenants are doing much of the heavy lifting, keeping fundamentals on steady footing, according to a new Marcus & Millichap analysis.
Grocery stores remain the sector’s most consistent performer, with vacancy holding below 3% since mid-2017. The segment has now logged 79 consecutive quarters of positive absorption, ending the latest period with a 2.3% vacancy rate—only 20 basis points higher than a year earlier. Over the past year, grocers have absorbed 4.1 million square feet, led by expanding chains such as Aldi, Publix, H-E-B, Trader Joe’s, Sprouts, Schnuck Markets, Grocery Outlet and Lidl. Development continues at a restrained pace, with new projects accounting for just 0.8% of existing stock…