The Midwest Market encompasses a varied set of states that mainly include: Missouri, Kansas, Minnesota, Illinois, Kentucky, Ohio, Indiana, Iowa and Wisconsin. The major cities and metro areas that highlight this market are St Louis, Kansas City, Indianapolis, Minneapolis/St Paul, Madison, Kansas City, Des Moines, Cincinnati and Columbus. Chicago although considered a cornerstone of the region acts more like one of the major metropolitan areas behind New York, Los Angeles, Miami, San Francisco and DC. It is the more representative of the primary market in trends and pricing even though it is a hub for retail commercial real estate and reporting, its’ behavior is an exception to the majority of Midwest’s NNN market.

As a whole, the Midwest sector is underserved and largely untapped in the NNN leased niche. There are virtually no firms specifically working on the NNN assets for this market. The majority of the investment grade listings are picked up by out of state brokers who may not be cognizant of the intricacies of the Midwest investor mindset and region particulars. The inner cities are full of hard corner fast foods, dollar generals and the convenience store assets with growing suburban areas filling in the gaps with numerous power centers and multiple outparcels. The big boxes are now saddled with “first time in the market” fill in concepts.

Where investment grade concepts were sticking with the largest East and West Coast cities, they are now moving slowly into the country’s heartland where there was less bubble activity and more stable market trends. The same credit tenants enjoy lower rent per square foot and therefore a “deal” on paper with demographics growing in similarity to the primary markets. Another caveat of the commercial growth in the Midwest is that it appears to be experiencing a slower recovery than the primary retail markets. However, it endured much less of the economic whiplash and back slide the major markets experienced so the growth is actually more consistent. Both individual investors and companies see the sideline markets such as the Midwest as one of stability and future growth. The lower rent rates and ability to still develop desirable areas has attracted more developers and concept expansion to the Midwest.