The market for single-tenant retail is seeing increasing investor demand. So much, in fact, that investors are being forced out of California to look for opportunities and yield. The driver of all of this demand? Baby boomers. The generation is retiring and cashing out of high-management properties, like office and apartment buildings, and into less management-intensive properties. Single-tenant, triple-net retail is the demographics' favored asset class.

“The baby boom generation is big, and they are all retiring. The 60 year olds to 80 year olds are retiring, and they are cashing out of an office building or apartment building into what I call coupon clippers,” Eric Carlton, SVP at Colliers International, tells GlobeSt.com. “It is mailbox money. Our grandparents used to buy bonds, and they would get paid every month. That is what is happening here. There is a socio-economic pattern that is happening with money that is being placed into single-tenant retail because of the age of our population. It is a retirement plan.”

The single-tenant retail market has grown not only in California, but in markets throughout the country—anywhere that quality properties with long-term leases become available. Fast food chains are a favored subcategory because of the stability. “If you buy a property like a McDonalds, it is a strong lease and it will be there for a long time. You can expect to get your check,” says Carlton. Those properties are difficult to find, however, and the baby boomer demographic accounts for a major portion of demand. “There is so much money as a result of this trend that it is almost single-handedly driving demand for this property type,” Carlton adds. “Now, inventories are down, and buyers are looking wherever they can to pick up a little bit more yield.”