Market Divide

Investors are weighing single-tenant NNN properties against mixed-use projects in distinct markets. In the Phoenix market, cap rates for NNN properties are around 5.5%, while mixed-use projects in the Denver market are commanding cap rates of 6.2%. Lenders are taking a cautious approach, with regional banks offering more competitive terms than national institutions. Buyers are walking away from deals with high vacancy rates or outdated infrastructure. The key to success lies in identifying undervalued properties with potential for renovation and repositioning. A comparison of local market trends and lender appetites reveals that a targeted approach can yield higher returns on investment. By analyzing these factors, investors can make informed decisions and navigate the complex commercial real estate landscape.