Grocery-Anchored Retail Continues to Perform
Non-listed REITs have a variety of investment strategies including retail, office, industrial, apartments, and medical office. Each investment strategy has a different risk/return profile and different return expectations that should be understood by investors. This understanding of commercial real estate strategies is essential in building a diversified investment allocation with sectors that have moderate to high expected returns. MTS’ new Sector Snapshots provide this critical strategy insight and education.
MTS’ Sector Snapshots highlight sector investment strategies, sector cap rates and cap rate spreads, investment risks, and expected performance. The investment strategy analysis highlights key investment trends for the commercial real estate sector with a focus on critical risks. The sector cap rate and cap rate spread analysis provide a historical and comparative market pricing analysis. The executive summary highlights key investment risks and details sector income and appreciation expectations.
Grocery-anchored retail is a strong performing commercial real estate sector. Grocery-anchored retail focuses on retail centers anchored by large national and regional grocers. These strong necessity retailers provide income security. Grocery-anchored retail non-listed REITs continue to obtain favorable pricing and financing on investments. Their average cap rate spread of 3.14% exceeds the average cap rate spread for all sectors, which highlights the above- average returns expectations for grocery-anchored retail. Key risks are market risk and short-term debt risk. Grocery-anchored retail should have stable distributions and moderate share price appreciation.
MTS’ Sector Snapshots are part of the MTS Education platform and will be included with their research subscription that includes market research (MTS’ Market Intelligence Reports), investment strategy analysis (MTS’ Sector Snapshots), and critical portfolio analytics (MTS’ Non-Listed REIT Reports). MTS Research provides comprehensive analysis of markets, strategies, and non-listed REITs to help advisors and broker-dealers make more informed investment decisions.
Article by Michael Stubben, President of MTS Research Advisors
MTS Research Advisors is a provider of data and analytics for non-traded REITs and BDCs.
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