Commercial Insights

Buyers are weighing single-tenant NNN (net net net) properties against mixed-use developments, focusing on cap rates and potential returns. For single-tenant NNN, cap rates range from 5.5% to 6.5%, offering a stable, hands-off investment. Mixed-use properties, with cap rates between 6% and 7.5%, appeal to those seeking diversification and potentially higher rents. However, buyers are cautious of mixed-use due to managgement complexities and tenant turnover risks. Key factors that make buyers walk away include low cap rates (below 5%), high vacancy rates, outdated properties requiring significant renovations, and locations with declining markeet trends or high crime rates. The ideal investment balance is found in properties with strong, creditworthy tenants, favorable lease terms, and a strategic locaion with growth potential, all contributing to a compelling ROI.