LAS VEGAS—The retail market is experiencing significant changes as cap rates continue to rise while values decrease, causing a decoupling of NNN returns from benchmark returns. This has piqued the interest of many investors in the single tenant market, including Chris Lomuto, Northmarq Associate Vice President, who spoke with GlobeSt.com about the topic in anticipation of the ICSC Las Vegas conference next week in Las Vegas.
Lomuto noted that cap rates have been rising at an average of 5-6 basis points per month, leading to a compression in the spread between NNN and benchmark returns.
The sustainability of this trend remains to be seen and may depend on investor expectations about the macro-economy, he notes. If investors anticipate a turnaround in benchmark returns, they may become more comfortable with lower cap rates, assuming that higher rates were a temporary phenomenon. However, if investors believe that elevated benchmark rates and inflation are here to stay, NNN cap rates may continue to drift higher.
Recommended For You
This uncertainty has created challenges for buyers and sellers in the single tenant market, as they attempt to navigate the shifting landscape. It remains to be seen how long this trend will continue and what impact it will have on the retail market as a whole. As Lomuto noted, the market is constantly evolving, and investors will need to stay informed and adapt their strategies accordingly.
Stay tuned for more coverage of the ICSC Las Vegas event from GlobeSt.com, including exclusive insights from attendees.
Also, check out the related stories already posted below:
Bankruptcies and Retailer Expansion Expected to Take Center Stage at ICSC Event
Glendale, CA Take Proactive Role in Encouraging New Business Growth
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
