Thriving necessity-retail properties are in locations supported by favorable demographic trends, have the ability to attract top-notch tenants and demonstrate sustainable traffic patterns due to market dominance, according to a report titled, “U.S. retail in the age of convenience culture,” by Ana Leon, director of retail research, Americas, Nuveen Real Estate, which was published in the October issue of Institutional Real Estate Americas.
“Strong yield spreads versus other sectors, combined with defensive income characteristics, make necessity retail an increasingly attractive component of diversified real estate portfolios,” says Leon. “Investors, however, must carefully consider market-specific regulatory environments, interest-rate sensitivity, tenant credit quality, and growing environmental, social and governance compliance requirements.”
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