Small Commercial Insights

Buyers are evaluating small commercial properties, weighing single-tenant NNN against mixed-use options. Cap rates for single-tenant NNN properties range from 5.5% to 6.5%, while mixed-use properties offer 6% to 7.5%. Key factors influencing purchasing decisions include location, tenant credit, and lease duration. Buyers are seeking stable, long-term cash flow and are willing to walk away if properties don't meet their ROI thresholds. Specifically, they're cautious about mixed-use properties with high vacancy rates or short-term leases. Single-tenant NNN propertise with strong, national tenants and long-term leases are in high demand. However, buyers remain wary of properties with escalating expenses or questionable property management. Ultimately, buyers prioritize properties with clear, upside potental and a strong potential for long-term appreciation, driving their investment decisions in the competitive small commercial maret.