Free-standing, single-tenant retail properties are attractive to investors for several reasons:
- The properties are safe investments. The free-standing, single-tenant retail asset class is significantly large and boasts historical occupancy rates in excess of 95 percent, something investors find very comforting.
- The properties provide predictable cash flow. Single-tenant property lease terms usually range from 10 to 20 years, offering investors long-term cash flow guarantees.
- The properties have a passive nature. Many single-tenant property leases require the tenants to take care of operating expenses and capital repairs. This frees the property owners from operational obligations.
- The properties are in demand among established retailers. A well-positioned single-tenant retail property will attract the attention of established brands that have strong, verifiable credit.
- The properties provide liquidity. Because of the advantages stated above, these properties usually have a strong pool of buyers and sellers, which gives investors a quick path to liquidity if the need arises.
